Will the escalating India-Pakistan conflict continue to rattle stock market?

Synopsis

India's Volatility Index surged implicit 10% connected Thursday owed to escalating India-Pakistan subject struggle concerns, triggering a precocious sell-off successful equities. The Sensex and Nifty some experienced declines, with the Nifty falling 140 points and the Sensex dropping 412 points. Heightened uncertainty among traders led to profit-taking, arsenic the VIX jumped astir 40% since April 15.

Mumbai: India's Volatility Index, oregon VIX - the banal market's fearfulness gauge - spiked implicit 10% Thursday, the biggest single-day emergence successful a month, aft the precocious sell-off successful equities amid concerns that the subject struggle betwixt India and Pakistan mightiness escalate, unnerved traders.

The Sensex and Nifty, which were trading marginally little for astir of the league Thursday, dropped sharply successful the past 30 minutes of trading pursuing reports that the 'Operation Sindoor'-India's subject cognition targeting sites successful Pakistan and Pakistan-administered Kashmir - volition continue. NSE's Nifty fell 140 points, oregon 0.6%, to adjacent astatine 24,273. Sensex declined 412 points, oregon 0.5%, to extremity astatine 80,334. Both indices had fallen arsenic overmuch arsenic astir 1% earlier cutting a information of the losses.

Agencies

"The marketplace dropped, whereas the India VIX spiked precocious connected Thursday aft the authorities notified that Operation Sindoor was inactive on, which heightened fearfulness and uncertainty among marketplace participants," said Rajesh Palviya, caput of method and derivatives probe astatine Axis Securities. "We saw immoderate profit-taking arsenic the sentiment turned negative."

VIX ended astatine 21 levels, up 10.21% astatine close, extending its caller run-up. The measurement has jumped astir 40% since April 15, suggesting options traders spot near-term risks to the marketplace successful the look of the India-Pakistan conflict and tariff worries. VIX surges erstwhile marketplace uncertainty increases and vice versa. The scale soared 65.7% connected April 7 - the biggest ever single-day beforehand - successful effect to the planetary uncertainty astir Donald Trump's reciprocal tariffs.

In Pakistan, trading halted for an hr connected Thursday aft the benchmark scale fell 7.2%.

“Historically, specified geopolitical events thin to effect successful heightened market volatility for 30–40 days,” said Shrikant Chouhan, caput of equity probe astatine Kotak Securities. “Consequently, traders with ample positions whitethorn statesman to trim their exposure, perchance starring to little volumes.”

Foreign portfolio investors (FPIs) were nett buyers worthy Rs 2,008 crore connected Wednesday, portion home organization investors (DIIs) sold equities worthy Rs 596 crore. Palviya said going ahead, arsenic agelong arsenic determination is uncertainty and fearfulness astir a war, sentiment volition stay bearish, and if the Nifty sustains beneath its enactment level of 24,200, it whitethorn autumn to the 23,800 level successful the abbreviated term.

“The adjacent 48–72 hours volition beryllium the astir important to spot if the tensions escalate to immoderate on-ground movement, oregon dice down, and this volition find the absorption of the markets,” said Amit Khurana, caput of equities astatine Dolat Capital Market.

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