On Friday, May 9, 2025, Indian stock markets experienced significant declines as geopolitical tensions between India and Pakistan intensified. The BSE Sensex dropped by 771.01 points to close at 79,566.02, while the NSE Nifty fell by 205.55 points to 24,068.25, extending losses from the previous day. ReutersMunsif Daily+1The Times of India+1
The market downturn followed India's 'Operation Sindoor,' which targeted nine terror sites in Pakistan and Pakistan-occupied Kashmir. In retaliation, Pakistan attempted drone and missile strikes on Indian military installations in Jammu and Pathankot, which were thwarted by Indian forces. Munsif Daily+1Rediff+1
Investor sentiment was further dampened by the rupee's decline, which fell 0.8% to 85.59 against the U.S. dollar, marking its worst single-day performance since February 2023. Additionally, the India VIX, a measure of market volatility, surged over 10%, reflecting increased investor anxiety. Reuters+2Reuters+2The Economic Times+2The Economic Times+1mint+1
Despite the initial sell-off, markets showed signs of recovery later in the day. The BSE Sensex rebounded nearly 1,065 points to 80,032.93, and the NSE Nifty 50 recovered more than 220 points to 24,158.70. The India VIX also moderated, falling to 21.78, though it remained up nearly 4% for the day. Reuters+4Business Today+4Reuters+4
Market analysts advise investors to remain cautious amid the ongoing geopolitical tensions, as further escalations could lead to increased volatility in the financial markets.