Market Turmoil Amid Geopolitical Tensions

India Pakistan tensions, Operation Sindoor impact: Investor wealth took a significant hit, with a staggering loss of Rs 7 lakh crore over just two sessions. The escalating conflict between India and Pakistan has left markets in a state of nervousness, leading to a widespread selloff.

Sharp Decline in Market Indices

The NSE Nifty dropped 265.80 points, or 1.10 per cent, settling at 24,008. Similarly, the BSE Sensex witnessed a consecutive fall, closing at 79,454.47 after losing 880.34 points, or 1.10 per cent. Over two sessions, the Sensex has plummeted by 1,292.31 points or 1.60 per cent.

Investor Reaction to Rising Uncertainty

The market capitalisation of BSE-listed companies eroded by Rs 7,09,783.32 crore, falling to Rs 4,16,40,850.46 crore (USD 4.86 trillion), as investors rushed to reduce exposure amidst growing geopolitical risks.

Sector-wise Impact

The realty index was the hardest hit, falling 2.08 per cent, followed by utilities, financial services, power, bankex, FMCG, and services. However, some sectors like capital goods, industrials, consumer durables, and metals managed to post gains.

Expert Insights

"Rising tension due to the Indo-Pak conflict prompted investors to flee local equities, even though global indices remained relatively firm," said Prashanth Tapse, Senior Vice President (Research), Mehta Equities Ltd.

"While conflict was on the radar, the intensity has caught markets off guard. However, it's still expected to be a short-lived escalation given India’s strategic advantage and the economic fragility of the adversary," added Vinod Nair, Head of Research at Geojit Financial Services.