Indian shares were lower on Wednesday morning, but had pared their early losses in the wake of India’s strikes on Pakistan and Azad Kashmir in response to last month’s attack in occupied Kashmir.
The benchmark Nifty 50 opened 0.6% lower but had cut its losses to 0.2% as of 10:30 a.m. IST. The Sensex too was down 0.2%. Nine of the 13 sectors were lower, while the broader small-caps were down 0.1% and mid-caps rose 0.3%.
“I’d still be a bit cautious. The market move may not settle so soon,” said Dharmesh Kant, head of equity research at Cholamandalam Securities.
India attacked Pakistan and Pakistani Kashmir, and Pakistan said it had shot down five Indian fighter jets in the worst fighting in more than two decades between the nuclear-armed enemies.
The South Asian neighbours had been exchanging shelling and heavy gunfire across much of their de facto border in the Himalayan region of Kashmir since an attack on tourists that killed 26 people in Indian-held Kashmir last month.
People had been taking short positions in the market in anticipation of an Indian retaliation. Now that the news is out, they are covering those positions, Kant said.
Defence stocks were mixed on the day, with Paras Defence and Space Technologies rising about 2%, while Bharat Electronics and Hindustan Aeronautics fluctuated between gains and losses.
Textile stocks soared as the India-U.K. trade deal, clinched on Tuesday, is expected to make Indian textile exports cheaper with zero tariffs, competing with China and Bangladesh.
Among individual stocks, Tata Motors jumped 3.2% as shareholders approved splitting the automaker into two listed firms, while the India-UK trade deal is also aiding the stock.
Paytm jumped 6% after the payments firm said it expects to turn profitable this quarter.
