Frontline indices took a hit on May 8 as rising military tensions between India and Pakistan rattled investor sentiment. The Sensex dropped 412 points, or 0.51%, to close at 80,334.81, while the Nifty 50 fell 141 points, or 0.58%, to end at 24,273.80.
The slide wasn't limited to the big names—broader indices fared even worse. The BSE Midcap index slumped 1.90% and the Smallcap index dropped 1.05%, reflecting the widespread nervousness across the market.
With geopolitical risks taking centre stage, market volatility shot up. The India VIX, which tracks market volatility, spiked 10.21%, its sharpest jump in weeks. The total market capitalisation of firms listed on the BSE took a steep fall, dropping to around ₹418.5 lakh crore from ₹423.5 lakh crore a day earlier. That’s a one-day erosion of nearly ₹5 lakh crore.
Market experts believe the trigger was the Indian government's statement that its armed forces had targeted Pakistani air defence systems. The official announcement said that in the early hours of May 8, Indian forces struck several radar locations in Pakistan, including one in Lahore, following a failed drone and missile attack by Pakistan on multiple Indian cities the previous night.
Defence ministry officials said Pakistan had tried to target cities including Jammu, Srinagar, Amritsar, and Chandigarh with unmanned aerial vehicles and missiles. Indian counter-defence systems reportedly neutralised the attack.
Though the market had already priced in some degree of geopolitical risk, the direct military exchange seemed to push investors into risk-off mode.
Most analysts say this sell-off appears to be driven by panic selling and profit booking. A major concern among traders is the potential for further escalation. While no one is certain how this standoff will play out, many investors preferred to trim exposure.
According to Prashanth Tapse of Mehta Equities, “Profit-taking was visible in almost all sectors, barring some IT names.”
Out of the 50 stocks in the Nifty, 45 closed in the red. The biggest losers included Shriram Finance (down 4.48%), Eternal (4.18%), Mahindra & Mahindra (3.55%), Adani Enterprises (3.53%) and Hindalco (3.19%).
Interestingly, five stocks managed to buck the trend. Axis Bank rose 0.75%, HCL Technologies gained 0.56%, and Kotak Mahindra Bank edged up 0.54%. Titan and Tata Motors also ended marginally in the green.
Almost all sectoral indices ended lower. The worst performer was Nifty Realty, which sank 2.47%. Nifty Metal (down 2.09%), Healthcare (1.95%), and Auto (1.90%) also posted steep losses. Pharma, Oil & Gas, PSU Banks, and Financial Services all ended lower too.
Only Nifty IT (up 0.23%) and Media (up 0.20%) managed to stay positive.
Vodafone Idea was the most traded stock on the NSE with over 44 crore shares changing hands. YES Bank (15.75 crore) and Canara Bank (7.85 crore) followed.
Amid the broader market weakness, a handful of smaller stocks posted double-digit gains. Nine stocks, including GACM Technologies Ltd-RE, Ginni Filaments and Pavna Industries, surged more than 10%.
The session saw 73 stocks hitting their upper circuits, including Shankara Building Products, Senco Gold and Pokarna. On the flip side, 61 stocks hit their lower circuits, including Womancart and Crown Lifters.
Out of nearly 3,000 stocks traded on the NSE, 2,027 declined, 820 advanced, and 88 remained unchanged. The broader sentiment was clearly bearish.
While 70 stocks hit 52-week lows on the BSE—including Jindal Saw, Jain Irrigation Systems and Syngene International—there were also 67 stocks that managed new 52-week highs. Notable among them were ICICI Bank, Ceat, Aster DM Healthcare and Marico.
(By arrangement with livemint.com)
