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Informist, Thursday, May 8, 2025

By Akash Mandal

MUMBAI – Benchmark indices fell sharply late in the trade Thursday and ended lower after the Indian government said Pakistan had increased firing along the Line of Control across Northern and Western India late Wednesday and that the Indian military had neutralised Pakistan's missile and drone attacks Wednesday night. The firing by the Pakistani military had killed 16 civilians, the government said. Unsettled by this development, benchmark indices fell as much as 1% but then made a recovery in the dying moments of the session to settle only 0.5-0.6% lower.

After moving in a narrow range, the indices fell after 1300 IST following the government's briefing. Volatility surged after the government's briefing and the India VIX jumped 15% to a one-month high before receding a bit and settling over 10% higher at 21.0075. The indicator, which is the fear gauge of the market, was down nearly 5% in early trade. The fear gauge has skyrocketed nearly 38% since Apr. 22, when Pakistani terrorists had killed 26 civilians at Pahalgam in Jammu and Kashmir. "Indo-Pak headlines will keep market volatile and VIX will remain in high above 20 level...next 3-4 days we may see action reaction by both countries," Prashanth Tapse, senior vice president of research at Mehta Equities, said.

Markets in Pakistan also faced the brunt of tensions between the two countries and trading was halted at the Karachi Stock Exchange after the benchmark KSE-100 index nosedived 7%. Pakistani stocks faced heavy selling after news that several Indian drones were shot down in major cities, including Karachi and Lahore, The Economic Times reported, citing Pakistani media outlets. The index had fallen over 6% Wednesday.

The Nifty 50 was dragged down by heavyweights such as HDFC Bank, Bharti Airtel, and State Bank of India. It ended at 24273.80 points, down 140.60 points or 0.6%. The BSE Sensex closed at 80334.81 points, down 411.97 points or 0.5%. Broader market indices ended 1-2% lower.

Barring the Nifty IT and Nifty Media, all other sectoral indices ended in the red. Nifty Metal, Nifty Realty, and Nifty Healthcare were the worst hit and ended around 2% lower each.

Shares of many companies also reacted to their March quarter earnings. Coal India came off highs but still ended nearly 1% higher. The company's consolidated net profit for the March quarter beat the Street's view by a large margin on the back higher realisation from coal sales. Niva Bupa Health Insurance Co. rose 15% to a five-month high after the company's net profit for the March quarter jumped up 31% on year due to a sharp rise in income from premium.

Dabur India ended 3% lower after Nirmal Bang downgraded the stock to 'hold' from 'buy' and various other brokerages cut their target price on the stock by 3-10%. The company's top line grew less than 1% on year for the March quarter, the slowest pace since the outbreak of the COVID-19 pandemic in March 2020. Voltas ended nearly 2% lower. The stock was up 4% in early trade after its consolidated net profit for the quarter doubled on year.

Shares of Canara Bank recovered and then rose nearly 5% after the bank's net profit for the March quarter beat the Street's view and rose 33% on year due to robust treasury income. The stock, which was down nearly 1% ahead of its earnings, ended the session 1.8% higher. Shares of Asian Paints fell nearly 2% after the company's bottom line for the quarter missed analysts' estimates by a considerable margin on account of a one-time cost of INR 1.83 billion. The company incurred the one-time cost due to losses from the sale of its Indonesian business.

Bharat Forge fell nearly 5% after its bottom line for the March quarter came in below the Street's view. The stock recovered from the day's low of INR 1,086.20 but still ended the session down 2.4% at INR 1,113.40. Escorts Kubota briefly recovered after its earnings before interest, taxes, depreciation, and amortisation margin for the March quarter rose by 100 basis points on year. However, the stock slipped back into the red soon after and ended slightly lower.

* Of the Nifty 50 stocks, 13 rose and 37 fell

* Of the Sensex stocks, 9 rose and 21 fell

* On the NSE, 820 stocks rose, 2,027 fell, and 88 were unchanged

* On the BSE, 1,349 stocks rose, 2,548 fell, and 135 were unchanged

* Nifty Realty: down 2.5%; Nifty Metal: down 2.1%; Nifty IT: up 0.2%

BSE                                               NSE

Sensex: 80334.81, down 411.97 points or 0.5%      Nifty 50: 24273.80, down 140.60 points or 0.6%

End

Edited by Ashish Shirke

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