Sensex, Nifty edge lower as India-Pakistan tensions escalate; US Fed meet in focus

Tata Motors, Power Grid Corp, Bajaj Finance, M&M, and SBI Life Insurance were the top gainers on the Nifty.

Benchmark indices Nifty and Sensex opened marginally lower on May 7, as investors cautiously navigated rising geopolitical jitters following India’s precision strikes on terror camps across the border. With tensions simmering and the US Federal Reserve's next move looming, markets opened on a tentative note.

By 9:55 am, the Sensex was down 130.35 points or 0.16 percent at 80,510.72, and the Nifty was down 47.05 points or 0.19 percent at 24,332.55. About 806 shares advanced, 2151 shares declined, and 121 shares unchanged.

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“The market could witness some consolidation due to geopolitical uncertainty, but earnings so far have been better than expected. Many investors are still on the sidelines, ready to deploy funds if sentiment improves,” said Aishvarya Dadheech, Founder and CIO of Fident Asset Management, in a conversation with Moneycontrol.

Devarsh Vakil, Head of Prime Research at HDFC Securities, noted that continued inflows from overseas investors into both cash and derivatives markets indicate underlying strength. “India’s solid macroeconomic footing, the sizable cash reserves of domestic mutual funds, and sustained foreign investor interest should help limit downside volatility and absorb the initial shock from Wednesday’s developments,” he said.

The broader market remained choppy. The Nifty Midcap 100 and Smallcap 100 indices quickly gave up early gains of 0.75 percent each to trade flat. Year to date, these indices are down 6.5 percent and 13.5 percent, respectively.

Sector-wise, Nifty Media led the losers with a 1.56 percent drop, followed by Nifty Pharma and Consumer Durables, which slipped 0.84 percent and 0.80 percent, respectively. IT, Oil & Gas, and Infra indices also saw mild declines. On the other hand, gains were modest—Nifty Auto and Private Bank indices rose 0.21 percent each, while Realty was up 0.20 percent. The Nifty Bank index added 0.29 percent, lending some support in a broadly cautious market.

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 Power Grid Corp, Bajaj Finance, M&M, and SBI Life Insurance. The top laggards included Asian Paints, HCL Tech, Nestle, Sun Pharma, and Grasim.

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