Benchmark indices Sensex and Nifty witnessed sharp volatility in early trade on Wednesday, May 7, following India’s precision missile strikes on terrorist hideouts in Pakistan and Pakistan-Occupied Kashmir. The strikes, part of ‘Operation Sindoor’, were a retaliation to the Pahalgam terror attack that claimed 26 civilian lives two weeks ago.
During the trading session, the Sensex fluctuated between a high of 80,844.63 and a low of 79,937.48, while the Nifty ranged from 24,449.60 to 24,220. Despite the initial nervousness, the market remained largely resilient, aided by consistent foreign inflows and confidence in India’s macroeconomic prospects.
The Indian military targeted nine terror-linked sites, including the Jaish-e-Mohammad headquarters in Bahawalpur and the Lashkar-e-Taiba base in Muridke. According to market experts, the non-escalatory and focused nature of the strikes helped limit broader panic in the financial markets.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the markets had already factored in a likely response from India, which contributed to their relative calm. He emphasized that Foreign Institutional Investors (FIIs) remain key to the market’s strength, having invested ₹43,940 crore over the past 14 trading sessions.
Vijayakumar also pointed to broader global cues supporting Indian equities, including a weaker US dollar, slower economic growth in the US and China, and India’s relative outperformance potential in 2025.
Among sectoral performers, Tata Motors, State Bank of India, HDFC Bank, IndusInd Bank, Bajaj Finance, and Power Grid were notable gainers. Meanwhile, HCL Tech, Asian Paints, Hindustan Unilever, Sun Pharma, UltraTech Cement, and Nestle lagged behind.
On the global front, South Korea’s Kospi, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng traded in positive territory, whereas Japan’s Nikkei 225 showed weakness. FIIs continued their buying momentum with purchases worth ₹3,794.52 crore on Tuesday, according to exchange data.
The market outlook remains cautious, with attention focused on geopolitical developments at the border, but investor confidence appears intact for now.
