Sensex Drops Nearly 600 Points Amid India-Pakistan Tensions; Nifty Nears 24,000

(RTTNews) - Indian shares fell notably on Friday, giving up early gains as uncertainty over geopolitical tensions prompted investors to book some profits and stay on cash.

Days after militants killed 26 civilians in Indian-administered Kashmir, the Indian and Pakistan armies exchanged fire across the Line of Control (LoC).

In the wake of the recent terrorist attack in Pahalgam, Jammu and Kashmir, India downgraded diplomatic relations with Pakistan and suspended the Indus Waters Treaty. In retaliation, Pakistan shut its airspace to Indian flights and suspended the Shimla Agreement.

Pakistan's defense minister Khawaja Asif, in a TV interview, has warned that India's moves following the Pahalgam terror attack, could lead to an "all-out war" between the two neighboring countries.

Elsewhere, Ukraine said it wants to pay back Russian "monsters" for the massive missile attack on Kyiv that killed at least 12 and wounded 90 people this week.

Domestic markets opened on a firm note earlier amid signs the Trump administration is making progress on trade negotiations and that the U.S. Federal Reserve may cut interest rates earlier than expected, if labor and growth data weaken notably.

The optimism faded as the session progressed. The benchmark S&P/BSE Sensex closed down 588.90 points, or 0.74 percent, at 79,212.53, after having hit a low of 78,605.81 earlier in the day.

The broader NSE Nifty index fell to 23,847.85 before recovering some ground to end the session down 207.35 points, or 0.86 percent, at 24,039.35.

The BSE mid-cap and small-cap indexes fell 2.4 percent and 2.6 percent, respectively. The market breadth was negative on the BSE, with 3,248 shares declining while 715 shares advanced and 121 shares ended unchanged.

Among the prominent decliners, Tata Motors, Tata Steel, Maruti Suzuki India, NTPC, Bajaj Finance, Power Grid Corp, Bajaj FinServ, Eternal, Axis Bank and Adani Ports tumbled 2-4 percent.