NIFTY50 falls over 300 points from day's high, SENSEX crashes over 950 points; here's why

The Indian equity benchmarks were witnessing heightened volatility in noon deals on Friday, May 2, as traders resorted to profit booking at intraday highs ahead of the weekend amid geopolitical tensions between India and Pakistan in the aftermath of the Pahalgam terror attack on April 22, analysts said. Reports of retaliation by Indian forces to avenge the Pahalgam terror attack led to selling pressure in the equity markets, analysts said.

As of 12:32 pm, the SENSEX was up 30 points at 80,275, and the NIFTY 50 index fell 64 points to 24,270.

According to a report by The Times of India, tensions erupted again at the Line of Control (LoC) as Pakistan violated the ceasefire for the eighth night in a row on Thursday. Indian forces hit back hard in Kupwara, Poonch, Naushera and Akhnoor.

This comes after India’s stern warning post the Pahalgam massacre. With repeated firing, border trade shut, and airspace blocked, signs of a dangerous escalation loom large, the TOI report added.

Meanwhile, sentiment further took a knock after the Supreme Court rejected JSW Steel's ₹19,700-crore resolution plan for Bhushan Power and Steel, terming it as 'illegal', according to various media reports.

The resolution plan, which was approved by Bhushan Power and Steel's committee of creditors in 2019, was set aside by the Supreme Court and said that the plan violated insolvency law as JSW had used a mix of equity and optionally convertible debentures (OCDs) to fund the takeover, instead of equity alone. It also flagged the failure to implement the resolution within the stipulated timeline, according to a report by Business Standard.

Following the top court's order, JSW Steel shares fell 7% to ₹956.

Back on Dalal Street, India VIX, the fear index, rose 3% to 18.77. Selling pressure was broad-based as all the major sector gauges compiled by the National Stock Exchange, barring the measure of oil & gas shares, were trading lower, led by the NIFTY Consumer Durables index's 1.6% fall. NIFTY Healthcare, Realty, PSU Bank, Metal, Pharma, FMCG and Financial Services and Bank indices were also trading in the negative territory.

Broader markets were also facing the heat of selling pressure as the NIFTY Midcap 100 index fell 0.98% and the NIFTY Smallcap 100 index dropped 0.15%.

JSW Steel was the top loser in the NIFTY50 index; it was followed by Eicher Motors (-3.15%), Bajaj Auto (-2.71%), Nestle India (-2.40%) and Hero MotoCorp (-2.23%).

On the other hand, Adani Ports rose 4.29% following better-than-anticipated March quarter earnings. IndusInd Bank (1.80%), Maruti Suzuki (1.21%), Eternal (1.17%) and Reliance Industries (1%) were also among the gainers.

The overall market breadth turned negative as 2,029 shares were declining while 1,741 were advancing on the BSE.