Indian equities witnessed a broad-based selloff on Friday, ending the session with steep losses as weakness persisted across sectors. The Nifty 50 fell 275 points (1.14%) to 23,898, and the Sensex tumbled 1,000 points (1.29%) to 76,664, while India VIX rose 6% to close at 19.71. According to The Economic Times, IT stocks led the decline, pulling the sectoral index down over 5%, while pharma, healthcare and energy stocks also traded under significant pressure. Technical analysts note that the index faced resistance near its 100-day EMA on the daily chart, which capped the rally and triggered fresh selling, dragging it below the 24,000 mark. The broader setup now appears bearish, with the Nifty likely to drift towards 23,500, though 24,200 remains an immediate resistance level. However, Gift Nifty currently indicates a gap-up of around 180 points over Friday's close, suggesting a firmer opening for the upcoming week, though this remains tentative according to market experts.
In a striking back-to-back development that will weigh on foreign institutional sentiment toward Indian equities, J.P. Morgan has downgraded its allocation to Indian equities to Neutral in its Asia Equity Strategy note dated April 24, 2026, just one day after HSBC downgraded India to Underweight from Neutral. Two of the world's largest and most closely tracked global brokerages have now turned cautious on India within 24 hours of each other, citing overlapping concerns around stagflation, earnings risk, and relative valuation versus North and Southeast Asian peers. The timing and convergence of these two calls is significant, reflecting a shared macro thesis that the Iran war-driven energy shock, stagflationary impulse, and FII-unfriendly tax and operational environment have materially altered India's risk-reward equation relative to peers. As per ET Now, the brokerage noted that while India continues to remain a compelling investment destination over the long run, current market conditions call for caution. The structural narrative remains intact, but tactical headwinds warrant patience, with investors may finding better opportunities in other emerging markets at present.
J.P. Morgan has issued a stark warning that the Nifty could fall to 20,500 in a bear-case scenario, implying a sharp 15% drop from current levels. The brokerage has significantly revised its Nifty 50 targets, with the bull case now at 30,000, base case at 27,000, and bear case at 20,500 - down from earlier estimates of 33,000, 30,000, and 24,000 respectively. While the long-term outlook remains intact, near-term risks such as elevated valuations, Iran war uncertainty and energy disruptions persist. As per The Economic Times, the brokerage noted that India's valuation premium over the MSCI EM index has narrowed to 65% from a peak of 109%, but it still trades at a significant premium to peers such as Korea, Brazil, China, Mexico and South Africa, many of which offer cheaper valuations alongside similar or stronger forward earnings growth. The downgrades come as domestic institutional investors have cushioned the blow of $37 billion FPI outflow, but a $64 billion pipeline in the form of IPOs and QIPs is weakening existing holders and limiting the upside potential.
The broader market selloff extended to India's most valued companies, with the combined market valuation of seven of the top-10 most-valued firms dropping by ₹2 lakh crore last week. According to The Hindu BusinessLine, Tata Consultancy Services (TCS) emerged as the biggest laggard, with its market valuation tumbling ₹66,699.44 crore to ₹8,67,364.12 crore. Reliance Industries lost ₹50,670.34 crore from its valuation, which stood at ₹17,96,647.50 crore, while HDFC Bank's valuation dived ₹23,090.05 crore to ₹12,08,225.48 crore and LIC's dropped by ₹19,670.75 crore to ₹5,13,020.56 crore. Bharti Airtel's market cap declined ₹19,406.59 crore to ₹11,05,718.62 crore, and ICICI Bank's mcap edged lower by ₹14,663.27 crore to ₹9,50,345.40 crore. However, some companies bucked the trend, with Hindustan Unilever's valuation jumped ₹20,652.91 crore to ₹5,47,219.80 crore, State Bank of India's mcap climbed ₹19,522.76 crore to ₹10,16,752.53 crore, and Bajaj Finance went up by ₹8,253.64 crore to ₹5,73,690.81 crore. Reliance Industries remained the most-valued domestic firm followed by HDFC Bank, Bharti Airtel, State Bank of India, ICICI Bank, TCS, Bajaj Finance, Larsen & Toubro, Hindustan Unilever, and LIC.
From a technical perspective, the Sensex underperformed during the week, declining 1,829 points or 2.33%, reflecting broad-based weakness across sectors. According to Livelong Wealth, the index needs to reclaim the 77000 level to signal any meaningful bullish reversal, with further upside resistance placed near 77500. On the downside, 76500 acts as an immediate support base, and a breakdown below this level could open the path toward 76000. For the Nifty 50, immediate resistance is placed at 24,000, followed by 24,150 and 24,350 levels, while support is seen at 23,800 and then at 23,700. As per Choice Broking, a decisive break down below 23,500 could trigger further downside pressure, with traders advised to remain cautious and adhere to strict risk management practices. The market appears to be transitioning into a high-volatility consolidation phase, with sustainability of any upside depending on stability in crude oil prices, clarity on geopolitical developments, and earnings delivery from index heavyweights. Markets ended lower after two consecutive weeks of gains, weighed down by heightened geopolitical tensions and weak earnings commentary from IT majors, as noted by Religare Broking Ltd.
J.P. Morgan is repositioning portfolios toward tech-heavy markets as AI momentum accelerates across Asia. According to the latest Asia Equity Strategy report, there has been a sharp acceleration of gains across AI stocks in Asia this month, with improving developments around model capabilities, pricing and funding materially raising the future growth trajectory. The brokerage has upgraded technology and Taiwan in its regional allocation while lowering its allocation in Indian equities to Neutral. This shift reflects the macro environment evolving with risks of persistent inflation and slower growth shaping investment strategy, as noted by The Hindu BusinessLine. From a macro perspective, the report suggests this should most closely resemble another bout of 'stagflation', with investors advised to focus on non-economically sensitive structural growth opportunities.
