India’s equity benchmarks snapped a seven-session winning run on Thursday as investors turned risk-averse after a deadly militant attack on tourists in Kashmir heightened geopolitical risks in the region.
India announced a raft of measures to downgrade its ties with Pakistan on Wednesday, and Prime Minister Narendra Modi vowed to pursue perpetrators to “ends of earth”.
Suspected militants killed 26 men at a tourist destination in Kashmir on Tuesday in the worst attack on civilians in the country in nearly two decades. Indian Foreign Secretary Vikram Misri said that there was cross-border involvement in the attack.
“Sentiment remains cautious amid signs of escalation in geopolitical tensions between India and Pakistan,” said Devarsh Vakil, head of prime research at HDFC Securities.
Fears of an escalation pushed the blue-chip Nifty 50 index 0.34% lower to 24,246.7 at close while the BSE Sensex lost 0.39% to 79,801.43.
The benchmark indexes rose 8.6% over the previous seven sessions to settle at the highest closing levels of 2025 in the previous session.
IT stocks power India’s stocks to their best close of 2025
Eleven of the 13 sectors declined on the day. Midcaps and smallcaps ended little changed.
Heavyweight financials and information technology stocks slipped 0.5% and 0.3%, respectively.
Fast-moving consumer goods major Hindustan Unilever dropped 4.1% to be the biggest percentage loser among Nifty companies as its quarterly earnings narrowly missed estimates amid rising expenses and weak urban demand.
Shares of Nestle India erased intraday gains after it reported lower profit due to high commodity costs.
Among other stocks, Samhi Hotels jumped 11.1% after it announced a joint venture with Singapore’s GIC to develop upscale hotels in India.
Drugmaker Divi’s Laboratories gained 4.9%, leading the pharma index 1.1% higher, after Citi hiked price target and earnings estimates for the firm, citing potential benefits from weight-loss drugs.
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