Markets Close Lower Amid Indo-Pak Tensions; Sensex Sheds 412 Points, Nifty Below 24,300

Mumbai, May 8, 2025—Indian equity markets ended Thursday's session deep in the red as investors reacted nervously to rising geopolitical tensions between India and Pakistan and hawkish commentary from the US Federal Reserve.

The Sensex tumbled 411.97 points, or 0.51%, to close at 80,334.81, while the Nifty 50 dropped 140.60 points, or 0.58%, settling at 24,273.80. This sharp drop was primarily attributed to last-hour profit-booking and panic selling following reports of cross-border military operations.

Geopolitical Pressures Weigh on Sentiment

Investor sentiment was dented after the Indian government confirmed that its armed forces had targeted and neutralized Pakistani air defense systems in Lahore, in what is now being termed "Operation Sindoor." The operation reportedly targeted nine terrorist camps across Pakistan and PoK, triggering retaliation from Pakistan and further military activity near the border.

Adding to market jitters, S&P Global Ratings warned that the escalation could temporarily elevate credit risks in the region, although it expects the confrontations to remain limited in scope.

US Fed Commentary Adds to Caution

Further contributing to market pressure, Federal Reserve Chair Jerome Powell acknowledged elevated risks of rising inflation and weakening labor markets in the US, signaling no immediate rate cuts despite growing fears of an economic slowdown fueled by President Trump's aggressive tariff proposals.

Sectoral Breakdown: IT Gains, Realty Tanks

Of the 13 major Nifty sectoral indices, only IT (+0.23%) and Media (+0.20%) ended in positive territory. All other indices closed lower:

• Nifty Realty was the biggest drag, falling 2.47%
• Nifty Metal declined 2.09%
• Nifty Auto, Pharma, Oil & Gas, and FMCG also dropped more than 1% each

Mid and smallcap stocks underperformed:

• BSE Midcap Index fell 1.9%
• BSE Smallcap Index dropped 1%
• Nifty Midcap 100 closed 2.16% lower
• Nifty Smallcap 100 declined 1.6%

Top Movers

Biggest Gainer (Nifty 50):

• HCL Technologies: ₹1,580.70 (+1.11%)

Biggest Loser (Nifty 50):

• Shriram Finance: ₹615.80 (-3.27%)