Weekly Market Wrap: Markets Tumble Amid Escalating India-Pakistan Tensions (May 3–9, 2025)

Broader indices also suffered, with the BSE Mid-Cap and Small-Cap indices falling 1.39 per cent and 1.31 per cent, respectively.

Indian equity markets experienced significant declines this week, driven by heightened geopolitical tensions between India and Pakistan. The S&P BSE Sensex plunged 1,047.52 points, or 1.30 per cent, closing at 79,454.47, while the Nifty 50 dropped 338.7 points, or 1.39 per cent, to settle at 24,008. Broader indices also suffered, with the BSE Mid-Cap and Small-Cap indices falling 1.39 per cent and 1.31 per cent, respectively.

The downturn followed India's launch of "Operation Sindoor," a retaliatory strike targeting terrorist infrastructure in Pakistan after the April 22 Pahalgam terror attack that claimed 26 lives. 

Economic Indicators: Mixed Signals

Despite geopolitical tensions, India's Goods and Services Tax (GST) collection reached a record Rs 2.37 lakh crore in April 2025, marking a 12.6 per cent year-on-year increase. (livemint.com) This surge was driven by robust domestic transactions and a significant rise in imports.

However, India's foreign exchange reserves declined by $2.07 billion to $686.06 billion as of May 2, snapping an eight-week streak of gains.The Reserve Bank of India attributed the drop to its interventions in the currency market to stabilise the rupee amid global uncertainties.

On the services front, the HSBC India Services PMI edged up to 58.7 in April from 58.5 in March, indicating a strong expansion in the sector. However, business confidence fell to a two-year low due to concerns over rising competition and geopolitical risks.

Corporate Earnings: Mixed Results

Several major companies reported their quarterly earnings this week:

• Asian Paints: Net profit fell 44.92 per cent to Rs 1,256.72 crore, with revenues declining 4.27 per cent to Rs 8,329.59 crore.
• Coal India: Reported a 12.04 per cent increase in net profit to Rs 9,604.02 crore, with revenues slightly up by 0.31 per cent to Rs 34,156.35 crore.
• State Bank of India (SBI): Net profit declined 9.93 per cent year-on-year to Rs 18,642.59 crore, despite a 12.04 per cent increase in total income to Rs 1,43,876.06 crore. The bank declared a dividend of Rs 15.90 per share, with a record date of May 16 and payment date set for May 30.
• Kotak Mahindra Bank: Net profit decreased 14.07 per cent to Rs 3,551.74 crore, while total income rose 9.33 per cent to Rs 16,712.23 crore. The bank recommended a dividend of Rs 2.50 per share.
• Larsen & Toubro: Net profit increased 25 per cent to Rs 5,497.26 crore, with net sales rising 10.9 per cent to Rs 74,392.28 crore.
• Britannia Industries: Net profit grew 4.02 per cent to Rs 559.95 crore, and revenue increased 8.29 per cent to Rs 4,495.21 crore. The board recommended a final dividend of Rs 75 per share.
• MRF: Net profit surged 32.99 per cent to Rs 492.74 crore, with net sales up 11.43 per cent to Rs 7,074.82 crore. The company declared a final dividend of Rs 229 per share, bringing the total dividend for FY25 to Rs 235 per share.
• Titan Company: Net profit rose 12.97 per cent to Rs 871 crore, and revenue increased 23.76 per cent to Rs 13,897 crore.
• Mahindra & Mahindra: Net profit increased 21.85 per cent to Rs 2,437.14 crore, with revenue up 24.50 per cent to Rs 31,353.40 crore.
• Dabur India: Net profit declined 8.34 per cent to Rs 312.73 crore, while revenue saw a marginal increase of 0.55 per cent to Rs 2,830.14 crore.
• Godrej Consumer Products: Net profit jumped 65 per cent to Rs 432.10 crore, with net sales rising 6.3 per cent to Rs 3,577.81 crore.
• Marico: Net profit increased 7.86 per cent to Rs 343 crore, and revenue grew 19.84 per cent to Rs 2,730 crore. The company recommended a final dividend of Rs 7 per share, with a record date of August 1 and payment by September 7, subject to shareholder approval.
• Bombay Dyeing & Manufacturing Company: Net profit plummeted 82.63 per cent to Rs 11.54 crore, with revenues declining 5.68 per cent to Rs 359.02 crore.
• Bank of Baroda: Despite a 3.29 per cent increase in net profit to Rs 5,047.7 crore, the bank's stock fell 11.40 per cent due to market concerns.
• Zee Entertainment Enterprises: Net profit soared to Rs 188.4 crore from Rs 13.4 crore in the previous year, with operating revenue rising 1 per cent to Rs 2,184.1 crore.

Global Markets: Mixed Signals

In Europe, Swiss inflation fell to 0 per cent in April, while Sweden's Riksbank and Norway's Norges Bank held interest rates steady amid global economic uncertainties.

China's Caixin Services PMI dropped to 50.7 in April, the lowest in seven months, indicating a slowdown in the services sector. The People's Bank of China announced a 10 basis point cut in the seven-day reverse repurchase rate to 1.4 per cent and a 50 basis point reduction in the reserve requirement ratio, aiming to inject approximately USD 138.6 billion into the financial system.

Outlook

The Indian markets remain under pressure due to escalating geopolitical tensions and mixed economic indicators. Investors are advised to exercise caution and stay informed about developments in the region.

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