India-Pakistan Tensions Push Sensex Down Nearly 800 Points
| 2025-05-09
The BSE building
Rising India-Pakistan conflict triggers steep losses in Indian stock markets, with Sensex plunging nearly 800 points and Nifty falling below key support levels.
Indian Markets Slide Amid Escalating India-Pakistan Conflict
Indian stock markets continued their downward trajectory on Friday, with the benchmark BSE Sensex tumbling by nearly 800 points amid heightened geopolitical tensions between India and Pakistan. The NSE Nifty also declined sharply, falling below key technical support levels.
The downturn followed a series of military exchanges over recent days, including India's missile strikes on targets in Pakistan-occupied Kashmir and Pakistan, and Pakistan's attempted retaliatory attacks on Indian military installations, which were reportedly intercepted.
Markets React to Geopolitical Uncertainty
As of late morning trade, the BSE Sensex dropped by 771.01 points to 79,566.02, while the NSE Nifty declined 205.55 points to 24,068.25. The volatility was driven largely by fears of a wider regional conflict following a series of cross-border military actions.
According to the Indian Ministry of Defence, Indian forces launched “Operation Sindoor” on Wednesday, targeting nine suspected terrorist sites across Pakistan and Pakistan-occupied Kashmir. On Thursday night, Indian air defence systems, including the indigenously developed Akash missile system, were used to intercept drones and missiles launched from across the border, including attempted strikes in Jammu and Pathankot.
Despite these developments, some market analysts suggest the response from investors has been relatively restrained.
“Under normal circumstances, on a day like this, the market would have suffered deep cuts,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “However, the conflict has thus far underscored India’s conventional military superiority, and markets remain supported by strong global and domestic fundamentals.”
Mixed Sector Performance and Company Updates
Losses were widespread across several sectors, particularly in financial and infrastructure stocks. Companies such as Power Grid, ICICI Bank, NTPC, Adani Ports, Bajaj Finserv, and Bajaj Finance were among the leading decliners on the Sensex.
However, a few firms posted gains, buoyed by strong quarterly results. Engineering conglomerate Larsen & Toubro saw its shares rise by 4 per cent after reporting a 25 per cent year-on-year increase in consolidated net profit to ₹5,497 crore for the quarter ending 31 March 2025. Titan Company also gained nearly 4 per cent, driven by a 13 per cent rise in consolidated profit after tax, reaching ₹871 crore in the same period.
Other notable gainers included Tata Motors, State Bank of India, Asian Paints, and Mahindra & Mahindra.
Foreign Investment and Global Market Trends
Foreign Institutional Investors (FIIs) showed confidence in Indian equities on Thursday, purchasing shares worth ₹2,007.96 crore, according to data from Indian stock exchanges.
Asian markets were mixed on Friday. South Korea’s Kospi and China’s SSE Composite Index traded in negative territory, while Japan’s Nikkei 225 and Hong Kong’s Hang Seng indices showed gains. US markets had closed higher on Thursday, offering limited support to Indian equities.
In the commodities space, Brent crude oil prices rose by 0.53 per cent to $63.17 per barrel, adding further pressure on oil-importing countries like India.
Investor Caution Amid Global and Domestic Uncertainty
Analysts cited multiple factors contributing to investor caution. These include the sharp rise in the US dollar index, a rebound in global oil prices, uncertainty surrounding India-US trade negotiations, and weak cues from other Asian markets.
“The India-Pakistan conflict has exceeded market expectations, pushing investors into a risk-averse stance,” said Avinash Gorakshkar, Head of Research at Profitmart Securities. “While we are not witnessing a crash, volatility is certainly elevated, and further developments could sway sentiment.”
According to Seema Srivastava, Senior Analyst at SMC Global Securities, although geopolitical tensions have triggered corrections in the past, Indian equity markets often recover swiftly once the uncertainty clears. “Historical data suggests such pullbacks are typically limited to 5–10 per cent,” she noted.
Context: Tensions and Market Sensitivity
The recent escalation follows increased militant activity in Jammu and Kashmir and a string of retaliatory operations by Indian forces. Market watchers remain closely tuned to political and military updates, as prolonged hostilities could weigh on investor sentiment and impact economic stability in the region.
Despite immediate losses, India’s long-term market fundamentals—driven by domestic consumption, infrastructure spending, and technological exports—remain relatively intact. Still, analysts warn that prolonged geopolitical risk could dampen capital inflows and delay investment decisions.
As markets await further clarity on both diplomatic and military fronts, traders are advised to exercise caution and monitor developments closely.
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