Indian Stocks Drop Amid Escalating Tensions with Pakistan

BENGALURU, India — Indian stocks opened lower on Friday following an overnight escalation in tensions between India and Pakistan. Pakistani forces launched multiple drone and munition attacks along the western border, raising concerns of further conflict between the two nuclear-armed neighbors.

The Nifty 50 index fell 0.6% to 24,132.1, while the BSE Sensex dropped 0.54% to 79,952.51 by 9:15 a.m. Indian Standard Time. Both indices had initially opened about 1.5% lower before recovering slightly.

All 13 major sectors experienced declines, with small-cap and mid-cap stocks falling by 2% and 1%, respectively. Explosions were reported in Jammu late Thursday night amid the drone and missile attacks targeting military stations in the strategic Kashmir region. This conflict has already resulted in nearly four dozen casualties over two days.

“Developments like these invariably create an environment of uncertainty which will prompt some investors to wait and see how events unfold,” said Peeyush Mittal, a portfolio manager at Matthews Asia. However, he noted that it’s unlikely investors will exit Indian markets entirely due to potential trade deals and the country’s economic resilience.

On the ground, blackouts have been reported across several regions, including Punjab, Kashmir, and Rajasthan, as authorities advise residents to stay indoors. The Indian Ministry of Defense stated that Pakistani forces fired eight missiles, all of which were intercepted by Indian Air Defense Units.

Pakistan denied the charges of aggression, asserting that its military acts are defensive. The Pakistan Information Minister, Attaullah Tarar, accused Indian media of spreading false narratives about their operations and maintained that no operational losses were incurred.

As the situation continues to develop, tensions are high. Schools in Punjab will remain closed for three days following the directive from state officials amid fears of escalation. Military activities and frequent gunfire exchanges near the Line of Control have characterized the ongoing unrest.

The international community is closely monitoring the situation, with calls for de-escalation from various diplomatic fronts, including from U.S. officials.