Operation Sindoor: Markets Dip Amid India-Pakistan Tensions
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Summary: Strong foreign investments and large-cap resilience prevented the Indian stock indices' drop after Operation Sindoor raised geopolitical tensions.
On May 7, 2025, Indian stock markets dropped after India launched Operation Sindoor, airstriking the targeted terrorist bases in Pakistan and Pakistan-occupied Jammu Kashmir. The BSE Sensex plummeted by more than 300 points, and the Nifty50 dipped below 24,300, indicating investor fears amid rising global concerns.
Despite the initial slump, market commentators noted that the operation's focus and lack of escalation helped to limit further declines. Geojit Financial Services Chief Investment Strategist VK Vijayakumar noted that the market had largely anticipated India's response, and sustained foreign institutional investor (FII) inflows of ₹43,940 crore over the past 14 trading sessions provided underlying support to the indices.
Sector-wise, companies like HCL Tech, Asian Paints, Nestle India, HUL, Titan, and Sun Pharma experienced a decline of up to 1.5%. However, Tata Motors, HDFC Bank, Power Grid, SBI, and IndusInd Bank showed resilience, with Tata Motors surging over 4% after shareholders approved a significant restructuring proposal.
While the immediate market reaction was muted, investors are on alert for any retaliatory steps and their consequences for regional stability. Analysts believe that ongoing FII interest, particularly in large-cap companies, could protect the market from protracted volatility.
