Pahalgam attack: Sensex, Nifty see high volatility after India launches missile strikes on terrorist hideouts in Pakistan

From the Sensex firms, HCL Tech, Asian Paints, Hindustan Unilever, Sun Pharma, UltraTech Cement and Nestle were among the laggards. File
| Photo Credit: AP

Benchmark indices Sensex and Nifty witnessed high volatility in early trade on Wednesday (May 7, 2025) after India launched missile strikes on terrorist hideouts in Pakistan and Pakistan-Occupied Kashmir (PoK).

Retaliating against the Pahalgam terror attack, Indian Armed Forces on early Wednesday (May 7, 2025) carried out missile strikes on nine terror targets in Pakistan and Pakistan-occupied Kashmir, including the Jaish-e-Mohammad stronghold of Bahawalpur and Lashkar-e-Taiba’s base in Muridke.

‘Operation Sindoor’ LIVE: India exercised right to act on terror, says Govt following strikes in Pakistan

The military strikes were conducted under ‘Operation Sindoor’ two weeks after the Pahalgam attack that killed 26 civilians.

“What stands out in ‘Operation Sindoor’ from the market perspective is its focussed and non-escalatory nature. We have to wait and watch how the enemy reacts to these precision strikes by India. The market is unlikely to be impacted by the retaliatory strike by India since that was known and discounted by the market,” V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

“The main catalyst of the market resilience in India is the sustained FII buying of the last 14 trading days which has touched a cumulative figure of ₹43,940 crore in the cash market,” he said.

“FIIs are focussed on the global macros such as weak dollar, slower growth in the U.S. and China in 2025, and India’s potential outperformance in growth. This can keep the market resilient. However, investors have to watch the developments in the border,” Mr. Vijayakumar added.

From the Sensex firms, HCL Tech, Asian Paints, Hindustan Unilever, Sun Pharma, UltraTech Cement and Nestle were among the laggards.

Tata Motors, State Bank of India, HDFC Bank, IndusInd Bank, Bajaj Finance and Power Grid were among the gainers. Foreign Institutional Investors (FIIs) bought equities worth ₹3,794.52 crore on Tuesday (May 6, 2025), according to exchange data.

In the Asian market, South Korea’s Kospi, Shanghai’s SSE Composite index, and Hong Kong’s Hang Seng were quoting in the positive territory while Japan’s Nikkei 225 traded lower. The U.S. markets ended lower on Tuesday (May 6, 2025).

“Markets now hinge on three catalysts: further military action, global tariff progress, and the U.S. Fed’s policy decision on May 7,” Prashanth Tapse, Senior vice-president (Research), Mehta Equities Limited, said.

India and the U.K. on Tuesday (May 6, 2025) sealed a landmark free trade agreement that will lower tariffs on 99% of Indian exports and will make it easier for British firms to export whisky, cars, and other products to India, besides boosting the overall trade basket.

Global oil benchmark Brent crude climbed 0.61% to $62.53 a barrel. Snapping its two days of gains, the BSE benchmark declined 155.77 points or 0.19% to settle at 80,641.07 % on Tuesday (May 6, 2025). The Nifty dipped 81.55 points or 0.33% to 24,379.60% .