Indian markets opened in the red on Friday, May 9, 2025, amid ongoing tensions with Pakistan, as the NIFTY 500 fell by 700 points and the Sensex declined over 500 points in initial trading. The situation escalated as India responded to cross-border aggression from Pakistan, which included drone and missile attacks targeting several locations in Jammu and Kashmir, Rajasthan, and Punjab. Reports indicate that Pakistani ground forces also fired into India from across the Line of Control and the International Border.
As the trading session unfolded, the Sensex was noted to be down by 600 points, while the NIFTY 50 dropped by 190 points. This marked a significant day for the markets, reflecting the heightened geopolitical tensions. On the previous day, Pakistan experienced a severe market downturn, suffering its worst single-day decline with markets falling by over 6,000 points.
Despite the overall market decline, defence stocks saw gains. Paras Defence rose by 3.52%, Hindustan Aeronautics Ltd (HAL) increased by 1.6%, and Bharat Electronics Ltd (BEL) climbed by 2.28%. Zen Technologies also saw a jump of around 4.99%, while Mazgaon Dock gained approximately 0.85%. The broader Nifty Defence index reflected this trend, gaining nearly 1.28% amid the escalating tensions.
Vinit Sambre, the Head of Equities at DSP Mutual Fund, commented on the situation, noting that the movement in defence stocks is attributed to higher order books and announcements from corporates. He also pointed out that the current commentary from corporations is not optimistic due to the uncertain environment, and that defence execution cycles tend to be longer.
The volatility in the markets was palpable, with the Nifty 50 down by 1.18% at 23,983.3 and the BSE Sensex losing 1.12% to 79,443.08 as of 10:53 a.m. IST. Twelve out of the 13 major sectors experienced declines, with small-caps and mid-caps falling by 1.8% and 1.2%, respectively. The volatility index, often referred to as the market's fear gauge, was set for its eighth consecutive session gain, reaching its highest level in over a month.
Ambareesh Baliga, an independent market analyst, noted, "The extent of escalation was not anticipated by the market." As blasts rang out across the Indian city of Jammu during the Pakistani attacks on military stations, fears of further escalation grew among market players. Traders reported that many were unwinding risk positions, indicating a cautious sentiment prevailing in the market.
In response to the geopolitical climate, the Indian rupee weakened by approximately 0.1% against the US dollar, and bond yields rose in early trades. However, analysts remained optimistic that investors would not entirely withdraw from Indian markets, citing hopes of a trade deal and the country's economic resilience.
In a related development, the U.S. has signaled plans to seal numerous tariff-lowering deals in the upcoming weeks, following a historic limited bilateral agreement with the UK. Tata Motors, which produces the luxury Jaguar Land Rover cars in Britain, saw its shares jump by 2% as multiple brokerages identified the automaker as a key beneficiary of the trade deal.
As the day progressed, more updates emerged from various sectors. The NSE Nifty Bank fell 1.55% to a day’s low of 53,515.50, marking the lowest level since April 17. ICICI Bank was noted as the top detractor in the index. Meanwhile, the BSE and NSE were actively monitoring cybersecurity threats amid the rising tensions between India and Pakistan, with exchanges operating in an enhanced vigilance mode.
In corporate news, Kaynes Technology India Ltd. announced that it has signed an agreement to acquire a 100% stake in August Electronics Inc. Additionally, BEML Ltd. declared a second interim dividend of ₹15 per share for the fiscal year FY25.
In the consumer sector, Titan Company saw its share price rise by over 4% following the announcement of its fourth-quarter results. The company reported a 13% increase in its consolidated profit after tax, reaching ₹871 crore for the March quarter, up from ₹771 crore in the previous year.
Larsen & Toubro Ltd. shares also rose by 4.61% to ₹3,477.00 apiece, the highest level since April 1, after the company reported a 25% year-on-year increase in net profit for the fourth quarter, reaching ₹5,497 crore versus ₹4,396 crore.
On the flip side, InterGlobe Aviation Ltd. saw its share price decline by 4.95% to ₹4,891.50 apiece, marking the lowest level since April 7, as the airline faced daily losses amid the growing tensions between India and Pakistan.
As the markets continue to react to the ongoing geopolitical situation, the focus remains on how these developments will shape investor sentiment and market dynamics in the coming days. The volatility observed in the markets reflects a cautious approach among investors, with many keeping a close eye on both domestic and international developments.
In summary, Friday's trading session was characterized by significant declines in the Indian markets amid escalating tensions with Pakistan, alongside notable movements in defence stocks and corporate earnings announcements. The situation remains fluid, with analysts and investors alike awaiting further developments that could impact market performance.
