Share Market Crash: Escalating tensions between India and Pakistan have severely impacted Indian equities, wiping out over ₹7 lakh crore from investor wealth in just two trading sessions. The fear of military escalation has triggered a wave of panic selling, dragging down key indices and market capitalization.
Stock market Investors Pull Back Amid Geopolitical Tensions
The NSE Nifty plunged 265.80 points or 1.10% to close at 24,008 on Friday, while the BSE Sensex declined for the second consecutive day, ending 880.34 points lower at 79,454.47, reflecting widespread investor anxiety.
In total, the Sensex has now fallen 1,292.31 points (1.60%) over the past two sessions. This drop has led to a massive erosion of investor wealth. The market capitalization of BSE-listed companies fell by ₹7,09,783.32 crore, bringing the total to ₹4,16,40,850.46 crore (approximately US$4.86 trillion).
Panic Selling Triggered by Cross-Border Attacks
The selloff was amplified after Thursday night’s drone and missile attacks by Pakistan on Indian military installations in Jammu, Pathankot, and surrounding areas. The Indian Army responded swiftly, escalating fears of a broader conflict.
According to Prashanth Tapse, Senior VP (Research) at Mehta Equities, “Investors are avoiding local equities due to the growing Indo-Pak conflict, causing heightened uncertainty and pressure on markets.”
Sectors Deep in Red; Realty and Financials Hit Hardest
Sector-wise, the real estate index led the fall, down 2.08%, followed by sharp losses in utilities, financial services, power, banks, and FMCG. On the other hand, capital goods, industrials, metals, and consumer goods managed to stay in the green.
Among the major losers were ICICI Bank, HDFC Bank, Bajaj Finance, Bajaj Finserv, Power Grid, UltraTech Cement, Reliance Industries, and Adani Ports. However, some stocks bucked the trend, including Titan Company, Tata Motors, Larsen & Toubro (L&T), and State Bank of India (SBI).
FIIs Buy, Retail Investors Stay Cautious
Interestingly, Foreign Institutional Investors (FIIs) continued to be net buyers on Thursday, showing resilience despite the volatility. However, retail investors appeared more cautious, preferring to wait for clarity before committing capital.
Analysts Call for Caution, Not Panic
While the market reaction is sharp, analysts advise a measured response. Vinod Nair, Research Head at Geojit Financial Services, said, “Though the rise in conflict has come as a surprise, India’s strategic and economic strength, compared to Pakistan’s fragile economy, could contain the fallout.”
He added that the investment outlook remains positive in the long term, but short-term volatility is likely to persist as geopolitical developments unfold.