
As the regional conflict escalated, the Bombay Stock Exchange (BSE) Sensex nosedived 880.34 points, or 1.1%, closing at 79,454.47—the steepest fall in over a month. The National Stock Exchange (NSE) Nifty wasn’t spared either, dropping 265.80 points to end at 24,008.67. Behind this financial meltdown: Pakistan’s powerful missile strikes in response to Indian provocation, triggering panic among investors and exposing India’s vulnerability.
Foreign Portfolio Investors (FPIs), once bullish on India, suddenly reversed course. According to NSDL and BSE data, a staggering ₹3,799 crore ($455 million) flowed out of Indian equities—the first such sell-off since mid-April. What makes this even more significant is that between April 15 and May 9, FPIs had injected nearly ₹50,000 crore ($6 billion), now swiftly retreating due to Pakistan’s assertive posture and regional instability.
Religare Broking strategist Ajit Mishra summed it up: India’s Volatility Index (VIX) soared 17% in just one week, a reflection of “deepening market anxiety” amid fears of prolonged military confrontation with Pakistan.
Among Sensex’s 30 stocks, 26 closed in the red. Financial giants like ICICI Bank fell 3.09%, PowerGrid dropped 2.61%, and Reliance Industries sank 1.84%, signalling systemic weakness. Real estate, banking, and financial services took the biggest hits, each falling over 1%. Only a handful of companies, including Titan and Tata Motors, showed temporary resistance—but the overall market mood was clearly in freefall.
Meanwhile, defence-related stocks rallied—an ominous sign of a nation preparing for wider conflict. Bharat Dynamics jumped 5.3%, Bharat Electronics rose 3%, and Hindustan Aeronautics gained 1.8%. Droneacharya Aerial Innovations hit its upper limit, closing 5% higher, fueled by fears of an extended war.
Multiple Indian states were forced to activate emergency protocols, shutting down over 30 airports and plunging cities like Jammu and Kashmir into blackout. Loud explosions, widespread panic, and airspace closures paint a grim picture of the situation on the ground.
Pakistan’s precision strikes not only damaged India’s image but also rattled investor confidence across global markets. With crude oil inching back to $75/barrel and the US Dollar Index crossing 100, emerging markets like India are struggling to hold on.
Even the Indian rupee showed signs of distress, fluctuating between 85.90 and 85.35 against the US dollar. The fear of continued Pakistani retaliation is now baked into market psychology, pushing investors toward safer assets.
While some Indian analysts still cling to the hope of a quick recovery, history shows that every confrontation with Pakistan leads to deeper economic wounds. With the Nifty facing critical support zones between 23,500–23,800, any further escalation from Pakistan could crash it below the danger zone. The so-called resistance level of 24,600 seems increasingly out of reach as long as Pakistan continues to retaliate with resolve.



