New Delhi [India], April 25 (ANI): Indian stock indices slumped sharply after early morning gains on Friday, with analysts attributing it to risk aversion and cautious approach from the investors in the awake of Pahalgam terror attack.

On Thursday, the stock indices snapped a seven-session winning streak after the terror attack sparked a diplomatic crisis. India kept in abeyance a key water-sharing treaty with Pakistan, besides reducing diplomatic staff on both sides, disallowing visas to Pakistanis, among others.

At the time of filing this report, sensex was trading at 79,028.29 points, down 773.14 points or 0.97 per cent, while Nifty was at 23,970.60 points, down 276.10 points or 1.14 per cent. Sensex's intraday low was 78,605 points.

'The potential headwind looming large on the horizon is the uncertainty regarding India's response to the terror attack and its consequences,' said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited. 'There are tailwinds and headwinds for the market now. A strong tailwind is the sustained FII buying...'

Manoj Kumar Jain, a financial market expert, was also of the view that the decline in the stock indices was due to risk aversion and cautious approach of investors.

An all-party was held Thursday evening, where all the Opposition parties conveyed their unanimous support to the government for any action it takes against the perpetrators, in the wake of the terror attack. Congress leader and Leader of Opposition in Lok Sabha, Rahul Gandhi, said Opposition parties gave full support to the government over any action it plans.

Barring these two days, market experts say that the positive bias in Indian equities was likely due to the return of foreign institutional investments. Expectations that the Trump administration's tariffs would not negatively impact India had also supported the latest rally in domestic stocks.

Indian stock indices had seen some upward movement since Trump's decision to pause the reciprocal tariffs on dozens of countries, including India, for 90 days. The tariffs had initially set off a sell-off in equities globally, and India was no exception. (ANI)