Indian Stock Market Reacts to Operation Sindoor: Nifty50 and BSE Sensex Experience Volatility
The Indian stock market experienced a rollercoaster ride on Wednesday, with the Nifty50 and BSE Sensex indices swinging between red and green in early trading hours. This volatility comes after India carried out Operation Sindoor, targeting terrorist facilities in Pakistan and Pakistan-occupied Jammu and Kashmir.
According to reports from the Times of India, at 10:21 AM, the Nifty50 was trading at 24,291.05, down 89 points or 0.36%. The BSE Sensex was at 80,387.58, down 253 points or 0.31%. The Indian Army confirmed that it had struck terror infrastructure used to plan and direct attacks against India.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that "what stands out in ‘Operation Sindoor’ from the market perspective is its focused and non-escalatory nature." He further added that "the market is unlikely to be impacted by the retaliatory strike by India since that was known and discounted by the market." Vijayakumar attributed the market resilience to sustained Foreign Institutional Investor (FII) buying, which has touched a cumulative figure of Rs 43,940 crores in the cash market over the last 14 trading days.
Among the major Sensex constituents, several companies experienced declines, with HCL Tech, Asian Paints, Nestle India, HUL, Titan, and Sun Pharma leading the downturn, declining by as much as 1.5%. In contrast, positive momentum was seen in Tata Motors, HDFC Bank, Power Grid, SBI, and IndusInd Bank at the market opening.
Tata Motors shares jumped more than 4% following the announcement that its shareholders had given approval for the company’s proposal to divide into two separate listed entities, with distinct divisions for passenger vehicles (PV) and commercial vehicles (CV).
Ajay Bagga, a Banking and Market Expert, told ANI that "the geopolitical risk that was hanging over the Indian markets has got crystallised today with the Indian strikes on PoK and Pakistan-based terror camps." He further indicated that "Indian markets will open with a negative gap as we saw when the Uri and Balakot strike news was announced."
The expert noted that subsequent market developments would be influenced by the unfolding circumstances in the days ahead. "The future impact on the market will depend on whether this strike remains contained to today or if it expands. Geopolitical risk remains elevated and we could see some more selling in the Indian markets," Bagga said.
The equity markets weakened on Tuesday as heightened tensions between India and Pakistan made investors cautious. Shrikant Chouhan, Head – Equity Research at Kotak Securities, noted that "the geopolitical tensions between India and Pakistan have put a halt to the strong market rally seen in the past 15-16 days." He further added that market volatility might cause the Nifty to decline by 200-400 points, though a more substantial decrease is improbable barring severe events such as military conflict.
Market participants will monitor the US Federal Reserve’s rate-setting meeting outcome on May 7. Despite expectations of unchanged interest rates, Federal Reserve chairperson Jerome Powell’s views on inflation and growth amidst tariff uncertainties could influence immediate market direction.
Foreign portfolio investors (FPIs) recorded net purchases of ₹3,795 crore on Tuesday, whilst domestic institutional investors (DIIs) offloaded equities worth ₹1,398 crore. US stocks declined for a second consecutive session on Tuesday following unclear statements from US President Donald Trump and Treasury Secretary Scott Bessent regarding trade agreement timelines.
Gold prices decreased on Wednesday as positive sentiment regarding potential US-China trade discussions reduced safe-haven asset demand, whilst investors awaited the Federal Reserve’s policy meeting later in the day.
As reported by the Times of India, the market will continue to react to the developments in the region, with experts advising investors to keep a close watch on the situation. The Times of India will provide live updates on Operation Sindoor and its impact on the Indian stock market.
Investors are advised to keep a close watch on the developments in the region and adjust their portfolios accordingly. As noted by VK Vijayakumar, "FIIs are focused on the global macros like weak dollar, slower growth in US and China in 2025 and India’s potential outperformance in growth. This can keep the market resilient."
The market will likely remain volatile in the short term, with experts predicting a possible decline in the Nifty. However, as noted by Shrikant Chouhan, a more substantial decrease is improbable barring severe events such as military conflict.
VK Vijayakumar also noted that "the big shift in market preference in favour of largecaps away from overvalued segments of mid and smallcaps is significant. FIIs, as always, are mainly buying largecaps. This trend can continue."
The impact of Operation Sindoor on the Indian stock market will continue to be felt in the days to come. As the situation unfolds, investors will need to stay informed and adjust their strategies accordingly.
