Indian Benchmark Indices Slide as War Fears Grow; India VIX Surges Past 21 Mark

Out of the 2,935 stocks traded on the NSE on May 8, 820 advanced, while 2,027 declined and 88 closed unchanged, indicating a weak market breadth.

Market Update at 4:15 PM: Benchmark indices closed in the red after a sharp decline in the latter half of the trading day. The Nifty 50 slipped 0.58 per cent, and the Sensex fell by 0.51 per cent, primarily due to rising geopolitical tensions between India and Pakistan.

Market volatility remained elevated as the India VIX climbed for the 10th time in the past 11 sessions. On May 8, the index surged over 12 per cent during the day, briefly crossing the 21 level, and settled with a gain of 10.22 per cent. This rise came after the government confirmed air strikes targeting Lahore's air defence systems.

In Pakistan, trading was briefly halted for an hour on the Pakistan Stock Exchange after its main index dropped sharply by 6.3 per cent.

Among gainers, Tata Motors rose nearly 2 per cent in early trading following news of a possible UK-U.S. trade agreement involving its Jaguar Land Rover division. However, the stock ended the session up by just 0.34 per cent.

Asian Paints' stock declined 1.3 per cent to Rs 2,303.8 after the company reported a lower-than-expected net profit of Rs 692.3 crore in the fourth quarter. Revenue from its decorative paints segment dropped 5.2 per cent, citing weak consumer demand. Trading volumes jumped to nearly double their 20-day average. The company declared a final dividend of ₹20.55 per share. Year-to-date, the stock is up only 0.88 per cent, lagging behind the Nifty 50's 2.69 per cent gain.

The Nifty Realty index dropped 2.5 per cent, reversing previous gains and hitting a 3-week low. Godrej Properties led the decline within the sector, plunging over 4.5 per cent.

Axis Bank and Kotak Bank were among the key positive contributors to the Nifty, adding 7.78 and 7.03 points respectively. On the flip side, Mahindra & Mahindra and HDFC Bank pulled the index lower, subtracting 22.46 and 20.28 points.

Broader markets also closed lower. The Nifty Mid-Cap 100 and Small-Cap 100 indices fell by 1.95 per cent and 1.43 per cent, respectively. Only 2 out of 17 sectoral indices ended in the green.

Out of the 2,935 stocks traded on the NSE on May 8, 820 advanced, while 2,027 declined and 88 closed unchanged, indicating a weak market breadth.

Market Update at 12:30 PM: Indian benchmark indices remained largely muted on Thursday as investors assessed rising geopolitical tensions with Pakistan alongside ongoing concerns about inflation and joblessness in the U.S.

At 12:20 a.m. IST, the Nifty 50 hovered near the flatline at 24,403, while the BSE Sensex showed little movement at 80,777.

Out of 17 key sectoral indices, five posted gains. Broader market segments also saw positive momentum, with the Smallcap and Midcap indices rising by 0.5 per cent and 1.07 per cent, respectively.

Despite the geopolitical uncertainty, foreign portfolio investors (FPIs) continued their buying streak, driven by optimism around India’s economic stability and potential U.S. trade agreements. FPIs have pumped in Rs 450.55 billion (about $5.3 billion) over the last 15 sessions, marking their longest buying spree in two years.

Meanwhile, the U.S. Federal Reserve held interest rates steady as expected, but signaled growing risks tied to inflation and unemployment. Fed Chair Jerome Powell’s remarks added uncertainty to the U.S. outlook, especially with ongoing trade policy challenges under President Trump.

On the corporate front, Tata Motors saw its shares climb 2.5 per cent amid speculation that the U.S. and UK might finalise a trade agreement later in the day, which could benefit its Jaguar Land Rover unit based in Britain.

Market Update at 10:00 AM: India’s key stock indices opened with marginal movement on Thursday as investors weighed escalating tensions with Pakistan alongside concerns from the U.S. Federal Reserve about inflation and unemployment risks stemming from the ongoing global trade conflict.

By 9:41 a.m. IST, the Nifty 50 slipped 0.11 per cent to 24,388.9, while the BSE Sensex edged down 0.07 per cent to 80,691.44. Among sectoral indices, seven out of 13 were in positive territory. Broader markets outperformed, with the Smallcap index advancing 1 per cent and the Midcap rising 0.2 per cent.

On Wednesday, both benchmarks closed flat after India carried out missile strikes in Pakistan and Pakistan-administered Kashmir. In response, Pakistan dismissed India's claims of targeting terror camps, labelling the strikes a violation of its sovereignty and alleging civilian casualties.

While geopolitical uncertainties kept some investors on edge, foreign institutional investors remained net buyers during the previous session.

Meanwhile, the U.S. Federal Reserve flagged increasing threats to economic stability, highlighting rising inflation and unemployment risks as trade tensions fuel uncertainty.

Tata Motors shares rose 2.5 per cent amid expectations of a potential trade agreement between the U.S. and the U.K., which could benefit its Jaguar Land Rover business based in Britain.

Pre-Market Update at 8:00 AM: Indian equity benchmarks—Sensex and Nifty 50—are expected to begin Thursday’s session on a weaker note due to escalating tensions between India and Pakistan and lackluster global market signals.

Despite geopolitical risks, the Indian stock market closed in the green on Tuesday. The Sensex rose by 105.71 points (0.13 per cent) to settle at 80,746.78, while the Nifty 50 moved up by 34.80 points (0.14 per cent) to end at 24,414.40.

Asian equities traded with mixed cues on Thursday, reflecting overnight gains on Wall Street following the U.S. Federal Reserve’s policy decision. Japan’s Nikkei 225 climbed 0.28 per cent, while the Topix remained flat. South Korea’s Kospi and Kosdaq advanced by 0.36 per cent and 0.61 per cent, respectively. 

Gift Nifty hovered around the 24,4012 mark, roughly 6 points below the previous close of Nifty futures, hinting at a subdued start for domestic indices.

US indices ended higher on Wednesday after the Fed kept interest rates steady. The Dow Jones surged 284.97 points (0.70 per cent) to close at 41,113.97, while the S&P 500 added 24.37 points (0.43 per cent) to finish at 5,631.28. The Nasdaq Composite rose by 48.50 points (0.27 per cent) to 17,738.16.

The Federal Reserve maintained interest rates in the 4.25 per cent–4.5 per cent range. Chair Jerome Powell stated that while the economy remains solid, sentiment has been dampened by uncertainty. He mentioned the possibility of future rate cuts, provided data justifies the move.

Tensions between India and Pakistan have intensified. Following India’s ‘Operation Sindoor’ that targeted nine terror camps, Pakistan’s Prime Minister Shehbaz Sharif warned of retaliation, stating that their armed forces are prepared to respond.

Gold prices moved higher, supported by safe-haven demand amid inflation worries and labor market concerns raised by the Fed. Spot gold rose 0.6 per cent to USD 3,384.99 per ounce, while US futures held steady at USD 3,392.00.

Crude oil prices remained largely flat after a sharp drop in the prior session. Brent crude stayed at USD 61.12 a barrel, while WTI inched up 0.1 per cent to USD 58.12 per barrel.

On May 07, Foreign Institutional Investors (FIIs) were net buyers, purchasing Rs 2,585.86 crore worth of shares. Domestic Institutional Investors (DIIs) bought shares worth Rs 2,378.49 crore during the same period. 

For today, CDSL, RBL Bank and Mannapuram Finance continue to remain under the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.