India-Pakistan Tensions Hit Stock Market: Sensex, Nifty Fall as Volatility Rises
India-Pakistan Tensions Shake Stock Market: Sensex, Nifty drooped, India VIX spiked.
The Indian stock market slumped dramatically on Thursday amid an upsurge in tensions between India and Pakistan. Sensex and Nifty50 fell, while market volatility increased, as reflected by a big jump in India VIX.
The sensex ended 412 points lower at 80,335 – down 0.1% – largely because 23 out of its listed companies closed below face value. The Nifty-50 declined 141 points or 0.6% to close at 24,274.
India-Pakistan Conflict Raises Investor Concerns
Expectations were high after India reported that it had stopped a coup attempt by the Pakistani military to attack Indian army bases in northern and western regions. India retaliated by attacking air defense systems retaining in Pakistan.This conflict spooked investors.
Major Sector Losses
Sectors such as automobile; metal; pharma; and PSU banks suffered the most heavily from the correction, as their indices fell by almost 2%. IT and media stocks, however, closed in green.
India VIX Surges 10%
IndiaVIX which gauges the market volatility shot up 10% touching 21.01, its highest level since April 9. This spike indicates that traders expect more market fluctuation in the next days. Devash Vakil of HDFC Securities attributed this jump to heightened levels of uncertainty caused by both the geopoliticals and the weekly index expiry.
Midcap and Smallcap Stocks as well fall.
The greater market even lost more. The Nifty Midcap 100 declined by 1.95%, the Nifty Smallcap 100 lost 1.4% wiping out the gains of the previous session.
Rupee Weakens Against the Dollar
The Indian Rupee also declined as it lost 89 paise thus finished at 85.71 against the US Dollar, with the current situation across the world found currency markets also react.
Experts Predict More Market Volatility
Experts opine that the India-Pakistan conflict, and the decisions of the United States on trade policies continue to give the direction to the market. Siddharth Khemka from Motilal Oswal opined volatility may remain high, as investors continue to watch the geopolitical developments and watch any key trade related announcements from the US.
Caution is further added to US Fed’s Comments
US Federal Reserve Chairman Jerome Powell has said that high inflation risks and continuing economic uncertainty mean it is a long way off before interest rates will be cut. This statement also turned global investors conservative.
Global Outlook Still Positive
In spite of all this ambiguity, the global markets were stable because of hopes of the US-UK trade deal, and the early indicators of the talks with China.
Also Read : Arunaya Organics IPO Listing: Share Hits Upper Circuit But Investors Face 45% Loss
Foreign Investors Continue To Buy Indian Stocks.
Indian stocks continue to attract serious foreign investment. On Thursday, FPIs (Foreign Portfolio Investors) purchased shares to the tune of ₹2,008 crore, this being their 16th N-day of buying. Since April 15, FPIs have pumped in almost ₹50,000 crore in Indian equities, making it the longest continuous bull rush since mid 2023.
