Rupee, shares, bonds drop on India-Pak conflict escalation

The Indian rupee, equities and bonds dropped on Thursday, pressured by risk aversion after India said it pushed back Pakistani retaliation overnight.

- Reuters

MUMBAI:

The rupee dropped 1% to 85.71, the Nifty 50 benchmark share index declined 0.6%, while the yield on India's benchmark 10-year bond rose 6 basis points.

The markets came under pressure in late afternoon trading after the Indian government said it had "neutralised" attempts by Pakistan to "engage" several military targets. Pakistan, meanwhile, said it had shot down 25 drones from India in its airspace.

"This is a knee-jerk reaction from the markets just as we had expected due to the escalation of border tensions," said Sandeep Bagla, CEO of Trust Mutual Fund.