Indian markets fall by $83 billion as border tensions rise

Indian shares fell for a second straight session, losing about $83 billion in market value, as intensified military action between India and its neighbouring Pakistan rattled investors.

The nuclear-armed neighbours have been locked in conflict since Wednesday, when India targeted multiple “terrorist infrastructure” locations in Pakistan in response to a deadly attack in India Kashmir last month. Pakistan retaliated, and the countries have exchanged cross-border attacks since.

The Nifty 50 (.NSEI), opens new tab fell 1.1% on Friday but closed above the psychologically key 24,000-point mark, while the BSE Sensex (.BSESN), opens new tab also lost 1.1% but ended below the 80,000 level it held the previous day.

At its lowest, the market was set to lose $108 billion.

The indexes fell about 0.5% on Thursday and have lost about 1.3% this week, snapping a three-week winning run, their longest this year.

India’s Nifty 50 snaps its longest weekly winning run in 2025 on Friday.

“With so much escalation, domestic markets are jittery because further retaliatory measures from Pakistan could lead to a prolonged, full-fledged conflict,” said Avinash Gorakshaka, head of research at Profitmart Securities.

“Fundamentals will take a back seat while sentiment influenced by updates from the conflict could derail market momentum at least for a week if the fighting continues.”

The volatility index (.NIFVIX), opens new tab, nicknamed the ‘fear gauge’, rose for an eighth straight session to hit a more-than-one-month high.

Other asset classes also suffered, with the central bank forced to step in to stem the rupee’s slide.

The stock market hit was broad. Twelve of the 13 major sectors declined this week, while the small-caps (.NIFSMCP100), opens new tab and mid-caps (.NIFMDCP100), opens new tab lost 1.9% and 0.8%, respectively.

Weekly performance of India’s key equity indexes

The one bright spot was auto stocks, lifted by Tata Motors’ (TAMO.NS), opens new tab 8.7% jump on hopes that the UK-US trade deal would boost the fortunes of its British unit JLR.

It was the top among the 11 Nifty 50 members that gained this week.

Analysts said hopes of a U.S.-India trade deal and the country’s economic resilience would keep traders interested in the market.

Weekly performance of India’s Nifty 50 constituents