Share Markets: After witnessing its best session in four years just a day earlier, the Indian stock market took a sharp U-turn on Tuesday, May 13, 2025. Benchmark indices Sensex and Nifty nosedived amid rising geopolitical tensions and global economic shifts, rattling investor confidence across Dalal Street.
The 30-share BSE Sensex plummeted 1,259 points or 1.5% to an intraday low of 81,170.99, while the NSE Nifty 50 tumbled 327 points or 1.3%, briefly touching a day’s low of 24,597.6. This dramatic dip came immediately after Monday’s euphoric rally, where Sensex surged 2,975 points (3.7%) and Nifty jumped 916 points (3.8%) in their sharpest single-day gains since 2020.
Key Drags: Infosys, Airtel, TCS Among Top Losers
Some of the biggest names in Indian IT and telecom bore the brunt of the sell-off. Infosys, Bharti Airtel, HCLTech, Power Grid, TCS, and Eternal Technologies were among the top laggards on the Sensex.
The Nifty IT index slipped over 2%, reversing its stellar performance on Monday, which marked the sharpest intraday gain since the COVID-era volatility in April 2020. Other sectoral indices like Nifty FMCG and Nifty Realty also declined by over 1%.
However, the pain was not evenly spread. The broader markets showed resilience, with BSE Midcap rising 0.28% and Smallcap edging up by 0.78%, indicating selective investor interest in mid and small-cap counters.
What Triggered the Market Crash on May 13, 2025?
1. Operation Sindoor
One of the key factors behind the market’s reversal is the rising geopolitical uncertainty between India and Pakistan. The recent Pahalgham terrorist attack, which claimed 27 lives, has reignited cross-border tensions. In response, India launched Operation Sindoor, a calibrated military offensive that reportedly dismantled nine terror camps across Pakistan and Pakistan-occupied Kashmir (PoK).
Despite a ceasefire agreement between the two nations effective from Saturday, May 10, 5 PM, the aftershocks of the military action continued to ripple through investor sentiment. Prime Minister Narendra Modi, in his address to the nation post-operation, lauded the Indian armed forces for their “display of new-age warfare” and “indigenous defence capabilities.”
G Chokkalingam, founder of Equinomics Research, said, “Investors are understandably jittery. While the operation showcased India’s strength, markets are pricing in the possibility of retaliatory action from Pakistan and its impact on regional stability.”
2. Global Headwinds from US-China Trade Truce
While geopolitical tensions weighed on domestic sentiment, international developments added to the pressure. A new US-China trade agreement, intended to cool down months of economic conflict, might spell trouble for emerging markets like India.
As per the deal, the US agreed to slash tariffs on Chinese imports from a punishing 145% to 30%, while China reduced its own duties on American goods from 125% to 10%. Though it signals easing global trade tensions, analysts believe the deal could shift supply chain advantages away from India, intensifying competition.
“China will now be in a better position to capture global export markets that India has been eyeing,” said a senior analyst at a Mumbai-based brokerage. “This will likely pressure India’s trade-dependent sectors, particularly manufacturing and technology.”
Investors Cautious Ahead of Key Data and Global Events
Market participants are also awaiting cues from the upcoming US inflation data and the RBI’s policy outlook amid rising crude oil prices. The twin impact of geopolitical tensions and trade realignment has created a cautious mood among institutional and retail investors alike.
While Tuesday’s fall may appear sharp, analysts say such corrections are not uncommon in volatile geopolitical and global trade environments.
“This is a short-term reaction, but the medium-term outlook will depend on how India manages its border tensions and how domestic companies adapt to the evolving global trade landscape,” added Chokkalingam.
Volatility Ahead as Markets Weigh Risks
Tuesday’s market slump serves as a stark reminder of how quickly sentiment can reverse in uncertain times. With political tensions brewing on the border and changing dynamics in global trade, investors may need to brace for continued volatility in the coming days.
For now, markets will be watching for any further statements from both the Indian and Pakistani governments, and how global economies, including China and the US, steer trade relations forward.
Stay tuned for more market updates and expert insights as the story develops.
