The increasing tension between India and Pakistan caused a significant drop in the Indian stock market on Friday. On May 9, both major indices, Sensex and Nifty 50, fell by over 1 percent.
By the end of trading, the BSE Sensex closed at 79,454.47, dropping 880.34 points or 1.10 percent, while the Nifty fell 265.80 points to 24,008.
The Nifty Bank index dropped 770.40 points, or 1.42 percent, to close at 53,595.25. Experts linked the market sell-off to the escalating tension between India and Pakistan following Operation Sindoor, a retaliatory action against the terrorist attack in Pahalgam, Jammu
and Kashmir, on April 22, which killed 26 people, mostly tourists. The intensifying conflict has caught investors off guard, but many experts believe the war will soon end, as India and Pakistan are unequal in terms of strategic and economic strength.
Vinod Nair, Research Head of Geojit Financial Services, noted that the market sentiment has not been greatly affected by the sudden outbreak of war, as most people expect the situation to return to normal due to India’s strong geopolitical position.
Ajit Mishra, Senior Vice President (Research) at Religare Broking, said, “From a technical perspective, Nifty is around key moving averages, suggesting further declines could be possible.
It’s in the support zone of 23,800, and breaking this level could lead to a further drop to 23,200. If there is a rebound, resistance could be strong in the 24,400-24,600 range.”
He also pointed out that the rising geopolitical tensions have significantly increased market volatility, as 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, identified immediate resistance for the index at 24,200, with a potential upward bounce from below that level.
Devarshi Vakil, Head of Prime Research at HDFC Securities, highlighted that the short-term trend for Nifty remains weak, with resistance in the 24,150-24,340 range and immediate support at 23,850.