Fears of a US recession are one of the main causes of the market slide as the Sensex drops 700 points from its peak and the Nifty goes below 24,350.

As investor sentiment was impacted by worries about a potential US recession and tensions along the India-Pakistan border, the equity benchmarks gave up early gains and experienced a significant reversal in Friday afternoon trading.

The BSE Sensex surged 935.69 points, or 1.16 percent, to an intraday high of 81,177.93 after starting the day with significant gains. Later, though, the index turned negative, falling 80,168.59 at 12:30 PM, 1,009.34 points from the day's peak.

The NSE Nifty experienced a steep decline as too, dropping 254.95 points from its peak to 24,238.50.

Major laggards, including Hero MotoCorp, Bajaj Auto, Eicher Motors, Nestle India, and JSW Steel, had declines of up to 6%. 1) Profit Booking: Following the early-morning rise, domestic markets saw significant profit booking. Amid concern about the global outlook, traders decided to lock in gains as important US economic data was about to be released.

2) Rising Crude Prices: Following a postponement of negotiations between Washington and Tehran, US President Donald Trump threatened secondary penalties on Iran, which caused crude oil prices to spike by almost 2 percent overnight. As OPEC+ gets ready for its next meeting, which is likely to see additional output increases, more price rises are anticipated. India, which imports more than 80% of its petroleum needs, is negatively impacted by rising oil costs. 3) Fears about the US Recession: Additionally, new concerns regarding the state of the US economy played spoilsport. After expanding by 2.4 percent in the previous quarter, the U.S. economy fell at an annualized pace of 0.3 percent in Q1 2025, according to the Commerce Department's initial estimate. Global commerce and investor appetite are thought to be at risk from any recession in the largest economy in the world, particularly for emerging countries like India. 4) India-Pakistan Border Tensions: Markets were also tense due to growing tensions along the Line of Control (LoC). For the eighth consecutive night, the Pakistan Army used unjustified shooting on Thursday night in several regions of Jammu and Kashmir. The Indian Army reacted forcefully. Any increase could make investors feel more risk averse and cause them to flee for their lives.