Sensex down 100 pts, Nifty below 24,400 as India-Pakistan tensions, US Fed meet keep investors on edge

The top laggards included Asian Paints, Sun Pharma, ITC, IndusInd Bank and Grasim.

Benchmark indices Nifty and Sensex swung between gains and losses on May 7 as geopolitical tensions flared after India launched pre-emptive strikes across the border, keeping investors on edge. Adding to the caution, markets turned watchful ahead of the US Federal Reserve's policy outcome later in the day. While no rate cut is expected, all eyes are on Fed Chair Jerome Powell’s commentary, especially around trade tariffs and their potential impact on inflation, factors that could sway global market sentiment.

At noon, the Sensex was down 48.75 points or 0.06 percent at 80,592.32, and the Nifty was down 3.35 points or 0.01 percent at 24,376.25. About 1631 shares advanced, 1653 shares declined, and 130 shares unchanged.

Follow our LIVE blog for all the latest market updates

"What stands out in Operation Sindoor from the market perspective is its focused and non-escalatory nature. We have to wait and watch how the enemy reacts to these precision strikes by India. The market is unlikely to be impacted by the retaliatory strike by India since that was known and discounted by the market," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

The main catalyst of the market resilience in India is the sustained FII buying of the last 14 trading days, which has touched a cumulative figure of Rs 43940 crores in the cash market. FIIs are focused on the global macros like a weak dollar, slower growth in the US and China in 2025 and India’s potential outperformance in growth. This can keep the market resilient. However, investors have to watch the developments on the border.

Also read: Pakistan defence minister Khawaja Asif says ready to 'end conflict' if India backs down

The Nifty Auto index rose 0.92 percent, followed by the Nifty Consumer Durables and Nifty Metal indices, which advanced 0.74 percent and 0.71 percent, respectively. Nifty Energy and Nifty Oil & Gas also posted gains of 0.64 percent and 0.31 percent. The Nifty PSU Bank index climbed 0.49 percent, while Realty, Private Bank, Infra, and Bank indices saw marginal upticks. On the other hand, Nifty FMCG declined 0.59 percent, Nifty Pharma slipped 0.36 percent, and both Nifty IT and Nifty Media dipped slightly by 0.06 percent.

The broader market remained choppy. The Nifty Midcap 100 and Smallcap 100 indices managed to gain strength to trade with gains of 1.12 and 0.6 percent, respectively. Year to date, these indices are down 6.5 percent and 13.5 percent, respectively.

Shares of Gokaldas Exports, Arvind Ltd, KPR Mill, Reymond, and Welspun Living surged up to 12 percent on Wednesday after India wrapped up negotiations on a much-anticipated free trade agreement (FTA) with the United Kingdom. The pact scraps the 8–12 percent import duty previously levied by the UK on Indian textiles and garments, putting Indian exporters on a stronger footing against global peers like Bangladesh and Vietnam. Industry watchers see the move as a game-changer for companies with a strong export footprint.

Read more: Pakistan's KSE-100 index suffers a 5 percent cut at open following Operation Sindoor

Defence stocks surged after the Indian Army and Air Force carried out strikes on nine terror bases under Operation Sindoor. Shares of Mazagon Dock Shipbuilders jumped 2 percent, Hindustan Aeronautics Ltd (HAL) gained 1.5 percent, and Bharat Electronics Ltd (BEL) rose 1.22 percent. The Nifty Defence index climbed nearly 1 percent, reversing the previous day’s losses as investors rotated back into defence names.

Tata Motors was the standout performer, soaring over 3 percent to top the Nifty charts. The rally followed near-unanimous shareholder approval for the demerger of its commercial vehicle business. The stock also found favour from the India-UK trade deal, which significantly lowers automotive tariffs from over 100 percent to 10 percent under a quota system.

“We had lowered our upside target yesterday, given the loss of momentum and distribution signals. While the Nifty found support near the 24,400–24,350 region, only 23.8 percent of Nifty 500 stocks are above their 10-day SMAs, indicating a potential turn in trend. If the index sees a sharp drop, support is likely around 24,050–23,930. On the flip side, holding above 24,280 could spark a quick recovery,” said Anand James, Chief Market Strategist at Geojit Financial Services.

Among other top gainers were Tata Motors, Power Grid Corp, Bajaj Finance, Titan Company, and SBI Life Insurance. The top laggards included Asian Paints, Sun Pharma, ITC, IndusInd Bank and Grasim.