Will India-Pakistan conflict lead to a major stock market decline?

Synopsis

The BSE Sensex fell 0.2%, oregon 155.7 points, to adjacent astatine 80,641, portion the NSE Nifty-50 slipped 0.3%, oregon 81.55 points to extremity astatine 24,379. Adani Enterprises, Jio Financial, SBI Life, Trent, and Eternal were among the apical Nifty losers.

Mumbai: The banal marketplace ended anemic connected Tuesday arsenic investors were connected borderline amid indications of a subject struggle betwixt India and Pakistan.

The BSE Sensex fell 0.2%, oregon 155.7 points, to adjacent astatine 80,641, portion the NSE Nifty-50 slipped 0.3%, oregon 81.55 points to extremity astatine 24,379. Adani Enterprises, Jio Financial, SBI Life, Trent, and Eternal were among the apical Nifty losers.

The broader marketplace took a sharper hit, with the Nifty Midcap 150 and Nifty Smallcap 250 indices dropping 2% and 2.2%, respectively. Out of the 4,072 shares traded connected BSE, 3,209 declined, portion 742 advanced.

"The geopolitical tensions betwixt India and Pakistan person enactment a halt to the beardown marketplace rally seen successful the past 15-16 days," said Shrikant Chouhan, Head - Equity Research, Kotak Securities.

Chouhan said the uncertainty could effect successful the Nifty falling 200-400 points, but a sharper autumn is improbable unless thing importantly adverse similar a warfare erupts.

Agencies

While India and Pakistan are yet to state warfare connected each other, the authorities said it volition behaviour mock drills crossed 244 cities connected May 7, seen arsenic a determination to hole civilians for emergencies similar a war.

Investors volition besides support a adjacent ticker connected the result of the US Federal Reserve's rate-setting gathering connected May 7. While the American cardinal slope is expected to support involvement rates unchanged, Fed chairperson Jerome Powell's appraisal of ostentation and maturation successful the aftermath of tariff-related uncertainties could thrust the near-term marketplace trends.

At home, shares of state-run banks were among the apical laggards connected Tuesday, with the Nifty PSU Bank scale plunging 4.8%. Bank of Baroda plunged 10.9% aft its 4th fourth results fell beneath marketplace expectations. Other PSU banks specified arsenic Bank of India, Union Bank, Indian Overseas Bank, Central Bank of India and Canara Bank dropped 5-7%.

Foreign portfolio investors (FPIs) were nett buyers worthy ₹3,795 crore connected Tuesday, portion DIIs sold equities worthy ₹1,398 crore.

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