After starting the day on a lower note, the benchmarks dragged as the session progressed and ended the day on a weak note.

Benchmark indices Sensex and Nifty dropped sharply on Friday after the army reported multiple overnight drone and munition attacks by Pakistani forces along the western border, fueling concerns of further escalation between the two nuclear-armed nations.

At the closing bell, the BSE Sensex stood lower by 880 points (down 1.1%).

Meanwhile, the NSE Nifty closed lower by 266 points (down 1.1%).

Titan, L&T, and Tata Motors were the top gainers today.

ICICI Bank, Grasim Industries, and Power Grid Corporation, on the other hand, were among the top losers today.

The GIFT Nifty ended at 24,08,0 down by 109 points.

The BSE Mid Cap ended 0.1% lower, and the BSE Small Cap index ended 0.3% lower.

Sectoral indices are trading mixed, with stocks in the finance sector and the realty sector witnessing selling pressure. Meanwhile, stocks in the metal sector and the capital goods sector witnessed buying.

The rupee is trading at 85.37 against the US$.

Gold prices for the latest contract on MCX are trading marginally lower at Rs 96,120 per 10 grams.

Meanwhile, silver prices are trading 0.2% lower at Rs 96,315 per 1 kg.

Here are three reasons why Indian Markets are falling today

1. Geopolitical Tensions

The escalating conflict between India and Pakistan, following India's drone strikes in Pakistan, has raised concerns about the possibility of a full-blown war. While markets had initially expected a more limited retaliation similar to past surgical strikes, the situation now appears to be more prolonged, increasing market uncertainty.

2. Broader Market Selloff

The broader market witnessed significant declines, with small- and mid-cap stocks falling nearly 2% in past 5 days. Rising volatility, combined with fears of further escalation over the weekend, led investors to unwind riskier positions, contributing to the market's downward movement.

3. Weakening Rupee

The Indian rupee continued its downward trend, opening at Rs 85.84 against the US dollar, a 12 paise decline from the previous close of Rs 84.72. This drop follows a sharp fall on Thursday, marking the rupee's worst session in over two years, as geopolitical tensions between India and Pakistan intensified, further weighing on market sentiment.
 

Why Yes Bank Share Price is Rising?

In news from the banking sector, shares of Yes Bank surged over 8% on May 9, reaching a three-month high, following media reports that both the bank's board and the State Bank of India (SBI) will hold separate meetings to finalize the sale of a stake in Yes Bank to Japan's Sumitomo Mitsui Banking Corporation (SMBC).

SMBC, which began discussions in 2024 to acquire a stake in the bank, is now in talks to acquire a controlling stake.

Currently, SBI holds a 23.97% stake in Yes Bank and may sell up to 20% of its holdings to SMBC. Over the past month, Yes Bank shares have surged nearly 14%, although the stock has seen a slight decline in 2025 so far.

Why L&T is Rising in a Weak Market

Moving on to news from the engineering sector, shares of engineering and construction giant Larsen & Toubro (L&T) surged by 5% to Rs 3,477.55 on the BSE during Friday's intra-day trade, following the company's strong operational performance for the March 2025 quarter.

L&T reported a 25% increase in net profit attributable to the company's owners for Q4FY25 (January-March 2025), driven by higher revenues and an exceptional gain.

The company posted a consolidated net profit of Rs 54.9 bn for the quarter, while revenue rose 10.9% year-on-year (YoY) to Rs 743.9 bn.

Order inflows for the quarter stood at Rs 896.1 bn, marking a 24% YoY increase. Notably, international orders accounted for 70% of the total order inflow, amounting to Rs 627.4 bn

As of March 31, 2025, L&T's consolidated order book reached Rs 5.79 trillion (tn), a 22% YoY increase, with international orders comprising 46% of the total.

During the year, the group secured new orders worth Rs 3.56 tn. Additionally, the board of directors recommended a final dividend of Rs 34 per share (face value Rs 2) for FY25, up from Rs 28 per share in the previous year.
 

Hotel & Realty Stocks Slip 7%. Here's Why

Moving on to the news, Shares of hotel and real estate companies came under pressure, falling by up to 7% on the BSE during Friday's intra-day trade, as both the BSE Sensex and the NSE Nifty dropped by 1% each following a deterioration in tensions between India and Pakistan late on Thursday.

Stocks of Indian Hotels Company (IHCL), Lemon Tree Hotels, EIH, Chalet Hotels, ITC Hotels, Samhi Hotels, EIH Associated Hotels, and Ventive Hospitality fell between 3% and 7%.

Real estate stocks, including DLF, Macrotech Developers (Lodha), Anant Raj, Godrej Properties, Prestige Estates Projects, and Sobha, saw declines in the range of 3% to 6% in intra-day trade.

The BSE Realty index was the biggest loser among sectoral indices, dropping 2.7%, compared to a 1.03% decline in the BSE Sensex. Intra-day, the realty index even dipped 4%.

The hotel and tourism sectors are expected to be impacted by the escalating tensions between India and Pakistan. The situation has already led to the closure of 27 airports across northern, western, and central India.

Additionally, the cyclical nature of the real estate market causes fluctuations in cash inflows. While cash outflows for projects and debt obligations remain relatively fixed, any slowdown in sales can result in a significant cash flow mismatch, potentially lowering expected collections in the medium term.

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