MUMBAI: Dalal Street witnessed heightened volatility on Friday, with the sensex closing 880 points, or 1.1% down at 79,454 points as armed conflict between India and Pakistan escalated on Thursday night.Market players also pointed out that foreign funds turned net sellers in Indian stocks for the first time in more than three weeks. On the NSE, the Nifty closed 266 points lower at 24,008 points.The sensex opened deep in the red, down more than 1,300 points, but made a slow recovery. Of the 30 index constituents, 26 closed in the red. According to Ajit Mishra of Religare Broking, as geopolitical tensions intensified, the domestic market came under pressure. “Elevated geopolitical risks have significantly heightened market volatility, as reflected in the surge of the India VIX,” Mishra said. In the last week, India VIX saw a 17% surge.

The day’s session saw foreign portfolio investors (FPIs) turning net sellers in stocks for the first time since April 15, NSDL data showed. On Friday, FPIs had a net selling figure of Rs 3,799 crore, BSE data showed. During the intervening period, foreign funds net infused about Rs 50,000 crore into Indian stocks.The day’s slide left investors poorer by Rs 2.1 lakh crore, with BSE’s market capitalisation now at Rs 416.4 lakh crore.While stocks from most sectors slid on Friday, those from the defence and drone sectors saw heavy buying interest. Bharat Electronics rallied nearly 3%, Bharat Dynamics was up 5.3%, Hindustan Aeronautics was up 1.8%, while Droneacharya Aerial Innovations closed at the 5% upper circuit. In contrast, airline, hotel, and tourism stocks were down sharply. Indian Hotels closed 4.1% lower, while Interglobe Aviation (Indigo) was down nearly 1%, and Thomas Cook (India) nearly 4%.