Sensex Dips 800 Points as India-Pakistan Tensions Escalate: Why Defence Stocks Are Still Shining
A Rocky Start for Indian Markets
Indian equity markets took a hit on May 09, 2025, with the **Sensex plunging 800 points** to 79,954 and the **Nifty dropping to 24,111** by 10:30 am, rattled by escalating tensions between India and Pakistan. The volatility followed Pakistan’s attempted aerial strikes on Indian military bases in Jammu, Pathankot, and Udhampur, which were neutralized by Indian forces. This came after India’s **Operation Sindoor**, a precision strike targeting terror hubs in Pakistan and Pakistan-Occupied Kashmir (PoK) in response to the Pahalgam terror attack. Despite a pre-market drop of over 1,300 points, the Sensex opened 500 points lower, showing signs of resilience.
Why the Market Didn’t Crash Harder
While geopolitical tensions typically spell doom for markets, experts point to two factors cushioning the blow: India’s clear superiority in conventional warfare and a resilient market bolstered by a weak dollar. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted, “The markets would have suffered deep cuts, but India’s demonstrated warfare superiority and global macro support, like a weakening US and Chinese economy, are keeping investor confidence intact.”
The Sensex’s quick recovery from a 1,300-point pre-market plunge to a 500-point opening loss reflects this resilience. The **Nifty**, which briefly fell below 24,000, also regained ground, signaling cautious optimism.
Defence Stocks: The Bright Spot
Amid the market turmoil, defence stocks continue to shine, driven by heightened demand for military equipment. Companies like **Bharat Dynamics (BDL)**, **Bharat Electronics (BEL)**, **Hindustan Aeronautics (HAL)**, and **Mazagon Dock Shipbuilders** have delivered returns of up to 35% in 2025, fueled by robust order books and government support. For instance, BDL’s stock surged 29.4% year-to-date, while Mazagon Dock gained 26.5%, as India ramps up defence spending post-Pahalgam.
In today’s trading, **BEL** was among the top gainers in the Sensex pack, alongside **Titan**, **Larsen & Toubro**, and **Tata Motors**, despite broader market losses. This resilience stems from massive order backlogs: HAL secured ₹1.2 lakh crore in FY25 orders, BEL holds ₹71,650 crore, and BDL has ₹20,700 crore in contracts. The government’s **Make in India** push further bolsters these firms, positioning them for export growth.
Winners and Losers in the Sensex Pack
While defence stocks held strong, other sectors faced selling pressure. **Power Grid**, **ICICI Bank**, **Ultratech Cement**, and **Eicher Motors** were among the major laggards in the Sensex, reflecting caution in banking, infrastructure, and auto sectors. Meanwhile, posts on X highlighted a sharp sell-off in airline and tourism stocks, with **InterGlobe Aviation (IndiGo)** and **SpiceJet** dropping 4% and 3.7%, respectively, as travel concerns mount.
What’s Next for Investors?
Analysts suggest the market’s reaction to India-Pakistan tensions may be short-lived, given historical trends. Anand Rathi’s study notes that Indian markets rarely correct more than 5-10% during such conflicts, except during the 2001 Parliament attack. Investors are advised to monitor defence stocks like **HAL** and **BEL**, which show bullish technical patterns. For example, BDL’s support lies at ₹1,345-₹1,289, while Mazagon Dock’s key support is at ₹2,842-₹2,930.
Pro Tip: Consider a long-call strategy for HAL (trading at ₹4,530) or BEL if you’re bullish, but use stop-losses to manage risks. Consult a financial advisor before trading options.
Conclusion: A Market Under Pressure but Resilient
The Sensex’s 800-point drop reflects the jitters from India-Pakistan tensions, but the market’s quick recovery and defence stocks’ strength highlight India’s economic resilience. With **Operation Sindoor** exposing Pakistan’s terror infrastructure and India’s military dominance, investor confidence remains steady. Keep an eye on defence stocks and key support levels, but stay cautious as volatility may persist.
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Defence Stocks Surge in 2025: Why Bharat Dynamics, Mazagon Dock, and HAL Are Investor Favorites
