Market Volatility Hits Dalal Street

The Indian stock market experienced significant volatility on Friday, with the Sensex closing down by 880 points, or 1.1%, at 79,454 points. This downturn was attributed to the escalating armed conflict between India and Pakistan, which intensified on Thursday night.

Foreign Funds Turn Sellers

For the first time in over three weeks, foreign portfolio investors (FPIs) turned net sellers in Indian stocks, with a net selling figure of Rs 3,799 crore on Friday. This shift marked a significant change in market dynamics, as foreign funds had previously infused about Rs 50,000 crore into Indian stocks during the intervening period.

Geopolitical Tensions and Market Impact

Ajit Mishra of Religare Broking noted that the domestic market came under pressure as geopolitical tensions intensified. "Elevated geopolitical risks have significantly heightened market volatility, as reflected in the surge of the India VIX," Mishra said. The India VIX saw a 17% surge in the last week, indicating increased market uncertainty.

Sector-wise Performance

While most sectors saw declines, defence and drone sectors attracted heavy buying interest. Bharat Electronics and Bharat Dynamics saw gains, while airline, hotel, and tourism stocks faced sharp declines. The day's slide left investors poorer by Rs 2.1 lakh crore, with BSE's market capitalisation now at Rs 416.4 lakh crore.