Sensex, Nifty sink, VIX spikes as India confirms strikes on Lahore defence

India's volatility gauge spiked in late hours of trading on Thursday after India confirmed that it targeted air defence radars and systems at many locations in Pakistan, a retaliation to the latter's attempt to engage several military targets in Northern and Western India. 

 

India VIX, the measure of market volatility in the domestic market, jumped as much as 12.6 per cent to 21.4, the biggest intraday jump since April 7 this year, according to Bloomberg data.  India VIX measures the market's expectation of future volatility based on the Nifty50 index options contracts. It typically indicates an increase in market volatility and suggests that investors are expecting higher uncertainty or risk in the near future.

 

The spike in volatility came even as the BSE Sensex fell 759 points in intraday trade to hit a low of 79,987 on Thursday, while the NSE Nifty50 fell 1.08 per cent to 24,150.  

 

The defence ministry said that India's response has been in the same domain with the same intensity as Pakistan's. It has been reliably learnt that an Air Defence system at Lahore has been neutralised.

 

"Pakistan has increased the intensity of its unprovoked firing across the Line of Control using Mortars and heavy-calibre Artillery in areas in Kupwara, Baramulla, Uri, Poonch, Mendhar and Rajouri sectors in Jammu and Kashmir," the defence ministry said. "Indian Armed Forces reiterate their commitment to non-escalation, provided it is respected by the Pakistani military."

 

Meanwhile, stock market trading in Pakistan was halted on Thursday as the benchmark KSE-30 index plunged 7.2 per cent. Since the Pahalgam terror attack, the KSE-30 index has shed 14.2 per cent, while the domestic Sensex index has moved higher by around 1 per cent. 

 

Pakistan retaliates against 'Operation Sindoor'

 

Stocks in Pakistan began their selloff after 'Operation Sindoor', where the Indian armed forces launched a series of strikes on terror infrastructure in Pakistan and Pakistan-occupied Kashmir (PoK). A total of nine sites were targeted by the Indian armed forces, with the Indian Army shortly announcing, "Justice is served."

 

Pakistan violated the ceasefire across the Line of Control (LoC) yet again, soon after the strikes by India, and carried out heavy firing along the border. As per reports, Pakistan fired artillery in Jammu and Kashmir's Bhimber Gali area.

 

The Indian Army is responding "appropriately in a calibrated manner", officials told news agencies.