Sensex Drops 412 Points Amid Escalating India-Pakistan Tensions; Nifty Falls Below 24,300

Indian equity markets ended Thursday's session, May 8, in negative territory as geopolitical tensions between India and Pakistan weighed heavily on investor sentiment. A day after India launched 'Operation Sindoor' targeting nine terrorist base camps in Pakistan and Pakistan-occupied Kashmir (PoK), market volatility spiked following the Indian government's confirmation that the armed forces had struck multiple air defense radar installations in Pakistan. Despite opening on a positive note, both benchmark indices witnessed sharp selling pressure during the final hour of trade. The Nifty 50 slipped 0.51% to close at 24,273, breaching the 24,300 mark, while the Sensex declined by 411 points, or 0.51%, to end at 80,334.The broader market saw steeper losses. The Nifty Midcap 100 index plunged 2.16%, and the Nifty Smallcap 100 dropped 1.6%, reflecting heightened risk aversion among investors. Pakistan's benchmark KSE-100 index mirrored the sentiment, crashing 6% during the session and triggering a trading halt. The sharp sell-off came amid fears of further escalation between the two nuclear-armed neighbors. Analysts warn that any further escalation may lead to increased volatility and potential capital outflows from emerging markets.

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Pakistan attempts late last night and early this morning to escalate tension with India by targeting military installations in 15 cities in the northern and western parts of the country - including Jammu and Kashmir, Punjab, and Gujarat - have been negated, the government said Thursday. The government said Indian forces responded by targeting and neutralising Pakistani Air Defence Radars and systems in several locations, including Lahore, in response to Pak attempts to attack military facilities in Srinagar, Pathankot, Amritsar, Ludhiana, Chandigarh, and other locations. Indian forces' response, the government underlined this afternoon, was "in the same domain (and) with the same intensity" as the attacks launched by Pakistan. Pak forces used drones and missiles that were disabled by India's air defence systems. Debris from the destroyed drones and missiles is being collected, the government said, and will add to the volume of evidence supporting India's charges that Pakistan, or the Pak deep state, supports cross-border terrorism targeting India, whether by financial funding or military training. Operation Sindoor, as the strikes were codenamed, spanned a 25-minute period that began Wednesday morning at 1.05 am and included a barrage of 24 munitions - from HAMMER smart bombs to SCALP missiles - that destroyed terrorist groups' HQs and training camps. Over 100 terrorists were killed in the strikes, Defence Minister Rajnath Singh said this afternoon. Op Sindoor was in response to the April 22 Pahalgam terror attack.