The growing tension between India and Pakistan led to a sharp decline in the Indian stock market on Friday, May 9. Both major indices, Sensex and Nifty 50, dropped by more than 1 percent.
At the end of trading, the BSE Sensex closed at 79,454.47, losing 880.34 points, or 1.10 percent. The Nifty fell by 265.80 points to 24,008.
The Nifty Bank index dropped by 770.40 points, or 1.42 percent, to close at 53,595.25.
Experts attributed the market drop to rising tensions between India and Pakistan, following Operation Sindoor, a retaliatory action after the terrorist attack in Pahalgam, Jammu and Kashmir, on April 22, which killed 26 people, mainly tourists.
The escalating conflict surprised investors, but many believe the war will soon end, as India has a stronger strategic and economic position compared to Pakistan.
Vinod Nair, Research Head at Geojit Financial Services, stated that the market sentiment hasn’t been heavily impacted by the outbreak of war, as most expect the situation to return to normal due to India’s strong geopolitical standing.
Ajit Mishra, Senior Vice President at Religare Broking, said that from a technical viewpoint, Nifty is near key moving averages, indicating that further declines are possible.
If the 23,800 support level is broken, the Nifty could drop to 23,200. On the other hand, a rebound could face strong resistance between 24,400 and 24,600.
He also noted that the rising geopolitical tensions have led to increased market volatility, reflected in the India VIX, which rose by 2.95 percent to 21.63 percent on Friday.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, pointed out that the immediate resistance for the index is at 24,200, with a possible bounce from below that level.
Devarshi Vakil, Head of Prime Research at HDFC Securities, mentioned that the short-term trend for Nifty remains weak, with resistance between 24,150 and 24,340, and immediate support at 23,850.
