Equities, Rupee, Gilts Slip on Indo-Pak Tensions 

HIGHLIGHTS

• Shriram Finance slips 6% as earnings miss Profit, NII estimates
• IndiGo shares fall as Pakistan Shuts Airspace for Indian flights
• India trying to secure greater access for steel exports through FTA talks,
• Cholamandalam Investment plans Gold loan foray after Poonawalla, L&T Finance
• India considers allowing 49% foreign stakes in nuclear power plants
• Indian EV makers to face challenges as China stops supply of rare earth magnets to India

Indian benchmark indices ended sharply lower on Friday as geopolitical tensions weighed on investor sentiment. The BSE Sensex and Nifty 50 shed over 0.5%, reacting to escalating tensions between India and Pakistan following the Pahalgam terror attack.

Markets opened weak and remained under pressure through most of the session, after Pakistan suspended the Simla Agreement and violated ceasefire norms along the Line of Control. The Indian Army responded effectively, but the uncertainty surrounding further developments kept traders on edge. The attack in Pahalgam, which claimed 26 lives, added to the cautious undertone.

Broader markets underperformed significantly, with the BSE Midcap and Smallcap indices dropping by 2.5% each, reflecting heightened risk aversion among retail participants.

Despite Friday’s fall, the Sensex and Nifty posted weekly gains of nearly 1%, supported by earlier sessions' strong performances.

SECTORAL PERFORMANCE 
Despite the overall weakness, selective buying in information technology stocks helped curb deeper losses, with the sector emerging as the lone gainer for the day. Bargain-hunting at lower levels supported frontline IT names, as investors sought defensives amid geopolitical concerns.

Sectorally, apart from IT, all indices closed in the red. Media, metal, PSU banks, telecom, power, oil and gas, and real estate stocks were the worst hit, losing between 2% and 3%.

Top Gainers	% Change	Top Losers	% Change
NIFTY IT	0.7%	NIFTY MEDIA	-3.2%
		NIFTY REALTY	-2.8%
		NIFTY HEALTHCARE INDEX	-2.4%
		NIFTY PHARMA	-2.2%
		NIFTY PSU BANK	-2.2%

Yields on Indian government bond edged higher on Friday, as escalating geopolitical tensions prompted traders to unwind positions and adopt a cautious stance. The benchmark 10-year bond yield rose 4 basis points to 6.3645%, as fears over regional instability grew following a terror attack in Jammu & Kashmir.

The market remained nervous throughout the session, and traders reduced their exposure to longer-duration gilts, leading to a spike in yields. Volumes remained muted as market participants stayed on the sidelines, awaiting further clarity on the geopolitical front

Tenure	Today	Previous
10-year Gilt	6.36%	6.32%
5-year gilt	6.14%	6.10%
5-year OIS	5.67%	5.66%

The Indian Rupee ended lower against the US dollar on Friday, surrendering early gains as escalating tensions with Pakistan triggered a risk-off sentiment in currency markets. The domestic unit closed at 85.45, down 18 paise after opening the session on a firmer note at 85.19.

Market sentiment turned cautious following reports of India’s withdrawal from the Indus Water Treaty, and a ceasefire violation by Pakistan along the Line of Control. 

Pressure also came from weakness in Indian equities, with major indices declining over 0.5%, further dampening foreign investor appetite. Traders noted a clear shift toward safe-haven assets like the dollar, as tensions between the India and Pakistan appeared to escalate.

Although the dollar index remained relatively stable, the broader geopolitical backdrop weighed more heavily on the rupee’s performance. 

Unit	Today	Previous
Dollar/Rupee	85.45	85.26
Dollar Index	99.37	99.17
1-year Dollar/rupee premium (%)	2.14%	2.18%

OUTLOOK
Indian equity markets are expected to open on a cautious note on Monday as geopolitical tensions between India and Pakistan continue to weigh on investor sentiment. With rising security concerns following the recent ceasefire violations and India’s withdrawal from the Indus Water Treaty, equities may face further selling pressure, particularly in sectors sensitive to global and domestic risk sentiment such as metals, energy, and financials.

Government bonds and rupee also likely to stay under pressure as well.  While any recovery in the dollar index may limit downside, geopolitical headlines will likely dominate currency moves. A sustained rise in crude oil prices could further compound pressure on the rupee, especially if foreign inflows remain subdued.

Key Events & Data Due Monday:
Economic Data

• India March IIP data

Corporate Actions

• Jan-Mar Earnings:  Adani Green Energy, AWL Agri Business,  Castrol India, Consolidated Construction Consortium, CSB Bank,  Dolphin Offshore Enterprises (India), Firstsource Solutions, Go Digit General Insurance, Hexaware Technologies, Kfin Technologies, KPIT Technologies, Nitco, Sanghi Industries, TVS Holdings, TVS Motor Company, Adani Total Gas, Aditya Birla Sun Life AMC, Greenply Industries, IDBI Bank, Indegene, KPIT Technologies, Nippon Life India Asset Management, Oberoi Realty, Plastiblends India, RPG Life Sciences, Shree Digvijay Cement, UltraTech Cement, Vimta Labs, Central Bank of India, UCO Bank, PNB Housing Finance, IIFL Capital Services, Hatsun Agro Product, Indian Railway Finance Corporation, and SecMark Consultancy, 
• Heads UP Ventures to consider fund raising
• Vimta Labs to consider dividend
• BEML to consider dividend