Weekly Market Recap As of May 9, 2025: Sensex, Nifty Drop Over 1% Amid Rising Geopolitical Tensions

The week ending May 9, 2025, saw both the Nifty 50 and BSE Sensex closing in the red for the second consecutive week, amid rising concerns stemming from the ongoing India-Pakistan tensions. A series of drone and munition attacks along the western border further escalated market unease, influencing broader market sentiments.

Nifty 50 Weekly Performance as of May 09, 2025

The Nifty 50 index experienced a decline of 1.39% in the week ending May 9, 2025, following a loss of over 1% last week. The index's consistent downtrend reflects the broader market’s response to geopolitical concerns, particularly the escalating tensions between India and Pakistan.

BSE Sensex Weekly Performance as of May 09, 2025

The negative sentiment also led to a broader sectoral pullback, with all 13 major sectoral indices ending in the red during morning trade on May 9. Notably, the small- and mid-cap stocks faced steeper declines, with losses of 2% and 1%, respectively.

Foreign and Domestic Institutional Investment Trends

In contrast to the broader market trend, FIIs have been relentless in their buying, continuing to inject significant capital into Indian equities. On May 7, 2025, FIIs bought shares worth ₹16,371.71 crore, while selling ₹13,785.85 crore, leading to a net inflow of ₹2,585.86 crore.

This marked the 15th consecutive session of FII inflows, underlining the persistent foreign interest in the Indian market, particularly in defence-related stocks like Bharat Electronics, Hindustan Aeronautics, and Paras Defence. Investors are anticipating increased defence spending amid geopolitical developments.

Domestic institutional investors (DIIs) also showed strong buying behaviour, with net inflows of ₹2,378.49 crore on May 7, 2025. DIIs bought shares worth ₹13,168.99 crore, while selling shares worth ₹10,790.50 crore, contributing to market support despite the downward trend in broader indices.

Conclusion

While Nifty and BSE Sensex struggled with losses, the inflow of funds from both FIIs and DIIs highlights continued confidence in the Indian market, particularly in defence and strategic sectors.

However, the geopolitical risks posed by India-Pakistan tensions remain a key concern for investors. If tensions escalate further, it could create additional volatility, leading to uncertainty in the market's near-term outlook.

The focus will now be on how the situation develops and whether global investor sentiment shifts in response to the regional security situation.

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