Markets slip as India-Pakistan conflict escalates

May 07, 2025 (MLN): India's benchmark indexes opened lower on Wednesday amid geopolitical tensions, following Indian strikes on Pakistan and Pakistan Kashmir, marking the most intense conflict between the nuclear-armed neighbors in over 20 years.

The Nifty 50 fell 0.6% to 24,233.3 and the BSE Sensex lost 0.86% to 79,948.8 as of 9:15 a.m. IST.

All 13 major sectors logged losses. The broader, more domestically focussed small-caps and mid-caps lost 1.5% and 1.3%, respectively.

India said it struck nine Pakistani "terrorist infrastructure" sites, some of them linked to an attack by Islamist militants on Hindu tourists that killed 26 people in Indian Kashmir last month.

Pakistan called the Indian strikes a "blatant act of war", while the United Nations called for maximum military restraint from both countries, as Reuters reported.

"Geopolitical uncertainties will drag domestic equities on the day and markets will closely watch the language from both India and Pakistan for any signs of further escalation," said Devarsh Vakil, head of prime research at HDFC Securities.

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