Sensex tanks 880 pts on India-Pak war fear; erodes ₹2.4 trn investor wealth

Stock market closing bell, Friday, May 9, 2025: Indian equity markets witnessed a sharp selloff on Friday, as escalating geopolitical tensions between India and Pakistan rattled investor sentiment. The benchmark BSE Sensex nosedived 880 points or 1.10 per cent, marking one of the steepest single-day falls in recent weeks. The broader Nifty50 also declined in tandem, shedding 265.80 points to settle at 24,008.

 

The selloff comes in the wake of reports that Pakistan fired eight missiles targeting various regions in India. Indian air defence systems successfully intercepted or neutralised the threats, but the move prompted heightened security alerts across New Delhi, Jammu & Kashmir, and Punjab, further stoking investor anxiety.

 

The sharp downturn led to a massive erosion of wealth on Dalal Street, with the total market capitalisation of BSE-listed companies plunging by ₹2.4 trillion, bringing the aggregate valuation down to ₹4,193,405.71 crore.

 

At close the BSE Sensex was quoted at 79,454.47 down 880 points or 1.10 per cent. The Nifty50 index ended lower by 265.80 points, or 1.10 per cent, to close at 24,008.

 

Across sectors, risk aversion was palpable, with heavyweight stocks bearing the brunt of the geopolitical overhang.

 

On the Sensex, only five constituents—Titan (up 4.25 per cent), Tata Motors (up 3.86 per cent), Larsen & Toubro (up 3.77 per cent), State Bank of India (up 1.52 per cent), and Asian Paints (up marginally 0.02 per cent), closed in the green. The remaining 25 stocks settled lower, led by ICICI Bank, Power Grid, UltraTech Cement, Bajaj Finance, and HDFC Bank, which fell in the range of 1.93 to 3.16 per cent.

 

Market breadth remained negative, with 2,498 out of 4,010 traded stocks on the BSE ending in the red. Meanwhile, 1,359 stocks advanced and 153 remained unchanged. Meanwhile, the volatility in the markets was high as the fear index (India VIX), a gauge of volatility, ended higher by 2.97 per cent at 21.63 points.

 

In the broader markets, shares of smallcap companies fell the most with Smallcap100 index ending lower by 0.61 per cent dragged by Sonata Software (down 6 per cent), Multi Commodity Exchange of India (down 5.25 per cent). Nifty Midcap100 index on the other settled with marginal loss of 0.01 per cent.

Realty, financials, private banks fall; PSU banks shine

 

Among the sectoral front, real estate stocks faced the worst hit as Nifty Realty index ended lower by 2.38 per cent dragged by Raymond (4.91 per cent), and Macrotech Developers (3.71 per cent). This was followed by Nifty Financial Services, and Private Bank indices which ended lower by 1.84 per cent, and 1.29 per cent respectively. That said, Nifty PSU Bank index defied the market trends and settled with gains of 1.59 per cent.

 

Among the other sectoral indices on the NSE, barring Consumer Durables and Media, all ended in red.

Analysts weigh in

Domestic factors, PFB the market wrap by Prashanth Tapse, senior VP (Research), Mehta Equities, said, continued to weigh on Indian markets even as global indices stayed firm, as rising tension due to the Indo-Pak conflict prompted investors to flee local equities. "Traders don't want to get caught off guard by risking their investments, as any escalation in war during the weekend could trigger major selling starting next week,” said Tapse.

 

Meanwhile, Vinod Nair, head of research, Geojit Investments, said that the conflict was anticipated, but the market was not expecting the situation to intensify, raising concerns about its duration. However, Nair believes it is still projected to be a short-lived confrontation, given the strategic advantage and the opponent’s weak economic standing. "Interestingly, Foreign Institutional Investors (FIIs) continued to invest in the Indian market until yesterday, while retail investors remain slightly cautious at the moment," Nair added. 

Technical view

Technically, the Nifty50 formed a small green candle on the daily chart; however, on the weekly chart, the index formed a bearish engulfing candle, reflecting weakness. According to Hrishikesh Yedve, AVP – Technical and Derivatives Research at Asit C. Mehta Investment Intermediates, the Nifty50 index continues to struggle near the crucial resistance zone of 24,590.

 

"As long as it remains below this level, the short-term upside appears limited. On the downside, key support for the Nifty50 is seen around the 23,850 level," said Yedve.

 

Meanwhile, analysts at Bajaj Broking expect the Nifty50 to extend its recent 11-session consolidation within the 24,600–23,800 range. The Nifty50, they said, has key support at the 24,000–23,800 levels, which is the confluence of the past three weeks' lows and a recent breakout level.

 

"Only a breach below 23,800 could pave the way for a deeper correction towards the 200-day EMA, placed near 23,500–23,400," said the analysts.