Indian stock indices opened in negative territory after tensions between India and Pakistan worsened. The benchmark Nifty50 fell below 24,150, and the BSE Sensex dropped below the 80,000 mark. By 9:16 AM, Nifty50 was down 161 points (0.66%) at 24,113.30. Meanwhile, the Sensex slipped 471 points (0.59%) to trade at 79,863.96.
Despite the current situation, the Indian stock market has largely stayed calm. Since the Pahalgam terror attack on April 22, both Nifty50 and Sensex have shown gains. In contrast, Pakistan’s stock market has witnessed a sharp decline.
Why the Indian Market Remains Stable
Experts believe that India’s economic fundamentals are keeping the market strong despite short-term shocks. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, explained, “Under normal circumstances, on a day like this, the market would have suffered deep cuts. But this is unlikely due to two reasons. One, the conflict, so far, has demonstrated India’s clear superiority in conventional war fare, and therefore, further escalation of the conflict will inflict huge damage to Pakistan. Two, the market is inherently resilient supported by global and domestic macros. Weak dollar and potentially weakening US and Chinese economies are good for the Indian market. The domestic macros construct is further rendered stronger by the high GDP growth expected this year and the declining interest rate environment. These are the reasons why FIIs have been on a buying spree in the Indian market during the last sixteen trading sessions. Investors should not panic and exit from the market now. Remain invested, monitor the developments and wait for the dust to settle.”
Thursday’s Losses and What Lies AheadOn Thursday, markets closed lower as investors reacted to geopolitical concerns. This volatility led to a wipeout of ₹5 lakh crore in investor wealth. Analysts say market uncertainty may continue as both India-Pakistan relations and US trade policies evolve.
Meanwhile, US stock markets rose after positive updates on US-UK trade and hints from former President Trump that talks with China could become more meaningful. Asian stock markets also inched up on Friday after the announcement of a new UK trade deal and expectations of lower Chinese tariffs.
Rupee Takes a Hit
The Indian rupee fell sharply, marking its biggest single-day drop in more than two and a half years. It closed at 85.58 per US dollar on Thursday, down by 81 paise. Experts say this fall is mainly due to rising India-Pakistan tensions.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said, “We expect the rupee to trade with a negative bias on the strong dollar and ongoing geopolitical tensions between India and Pakistan. Any further escalation may further pressurise the rupee. However, FII inflows may support the rupee at lower levels. Traders may take cues from weekly unemployment claims data from the US. USD-INR spot price is expected to trade in a range of 85.20 to 86.”
Investment Trends
On the trading front, foreign portfolio investors (FPIs) bought shares worth ₹2,008 crore net on Thursday. On the other hand, domestic institutional investors (DIIs) sold shares worth ₹596 crore net.
Gold Gains Ground
Gold prices went up on Friday as investors bought the metal following a recent drop. Many are looking ahead to the weekend’s trade discussions between the US and China, which may impact global markets further.
