Sensex, Nifty Sink as India-Pakistan Tensions Escalate; Investors Lose ₹6 Lakh Crore in Market Value

Markets tumble sharply after Indian Armed Forces target Pakistani air defence systems; Midcap, smallcap indices suffer steep losses amid rising geopolitical risk.

Mumbai | May 8, 2025:
The Indian stock market ended on a negative note Thursday as rising geopolitical tensions between India and Pakistan weighed heavily on investor sentiment. Following India’s strike on Pakistani air defence systems, key equity benchmarks—the Sensex and Nifty 50—closed lower, with the broader market underperforming.

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The BSE Sensex lost 412 points, or 0.51%, to settle at 80,334.81, while the Nifty 50 declined 141 points, or 0.58%, ending the session at 24,273.80.

The pain was more severe in the broader market:

• BSE Midcap index dropped 1.90%
• BSE Smallcap index fell 1.05%

The total investor wealth eroded by nearly ₹6 lakh crore, as BSE-listed companies saw their combined market capitalisation plunge to ₹417 lakh crore, down from ₹423 lakh crore the previous day.

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Top 10 Highlights from May 8 Market Session

1. Geopolitical Jitters Weigh on Sentiment:
   India’s announcement of air defence radar strikes in Lahore and other Pakistani locations sparked fears of further escalation. The market reacted sharply to the risk of prolonged conflict.
2. Heavy Selloff Across Sectors:
   All major sectors witnessed profit-booking, with the exception of select IT stocks, which managed modest gains amid the downturn.
3. Defensive Stocks Outperform:
   Investors showed interest in safer bets like IT and pharma, anticipating potential global market volatility if conflict intensifies.
4. Banking & Financials Drag Market:
   Banking and NBFC stocks were among the worst hit as fears of volatility and potential capital outflows gripped the street.
5. Volatility Index Spikes:
   India VIX, the fear gauge, rose sharply indicating rising nervousness among traders.
6. Market Breath Turns Negative:
   More than 2,300 stocks declined on the BSE, while just over 1,100 advanced. Nearly 160 stocks hit 52-week lows.
7. FII Activity Turns Net Negative:
   Foreign institutional investors (FIIs) were net sellers amid concerns over regional instability and global macro headwinds.
8. Safe-Haven Assets Rally:
   Gold prices surged in domestic markets and international benchmarks as investors sought refuge amid geopolitical uncertainty.
9. IT Stocks Buck Trend:
   Select IT majors gained on the back of safe-haven demand and defensive positioning.
10. Investors Brace for More Volatility:
    Analysts warn of further volatility if tensions between India and Pakistan do not de-escalate in the coming days.

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