Operation Sindoor: How final 5 India-Pakistan wars impacted Indian inventory market?

India-Pakistan battle: Indian indices edged barely decrease on the open amid rising geopolitical tensions, after India carried out strikes on 9 areas in Pakistan in response to final month’s assault in Kashmir.

The BSE Sensex stood at 80,596, down 0.06%, and the Nifty 50 additionally dipped 0.06% to 24,366 in early trades.

Nevertheless, the market took a U-turn, failing to dent buyers sentiment with the BSE Sensex climbing 70 factors to 80,710 and the Nifty 50 gaining 10 factors to succeed in 24,403.

Here is how Indian inventory market behaved throughout 5 India-Pakistan wars –

The Nifty 50 has usually proven resilience throughout earlier episodes of heightened tensions between India and Pakistan, with market downturns being comparatively gentle—averaging a drawdown of simply 5.27%, in accordance with report by Bajaj Broking’s Market Outlook report.

“Exceptions to this development embrace the 2001 Indian Parliament assault and the 2008 Mumbai Taj assaults, the place the market fell extra sharply—although a lot of that drop was as a result of world financial components quite than the conflicts themselves. General, this exhibits that buyers are likely to look previous short-term geopolitical occasions and focus extra on the broader financial outlook,” the brokerage agency mentioned.

This means that whereas short-term volatility is current, the market tends to get better and even ship strong beneficial properties over the medium time period.

1. Pulwama Assault 2019

As per Anand Rathi report, the Indian inventory market responded negatively following the Pulwama assault in 2019, with Indian indices dropping greater than 1.8 per cent from February 14 to March 1.

2. Uri Assault and Surgical Strikes 2016

The Indian market fell greater than 2 per cent between September 18 to September 26. Whereas the terrorists attacked an Indian Military base close to Uri in Jammu and Kashmir, the Indian authorities responded strongly by launching a surgical strike, concentrating on terrorist launch pads throughout the Line of Management in Pakistan-occupied Kashmir.

3. Mumbai 26/11 terror assault 2008

The Indian market witnessed a constructive transfer regardless of Mumbai being underneath siege in 2008. In the course of the two days of the assaults, the Sensex climbed by round 400 factors, whereas the Nifty gained 100 factors.

4. Indian Parliament Assault 2001

The assault on the Indian Parliament in 2001 led to a knee-jerk response for the Indian benchmark indices, however as stories of the scenario coming underneath management surfaced, each Sensex and Nifty recouped their losses. Whereas the Sensex ended 0.7 per cent decrease, the Nifty ended 0.8 per cent down.

5. Kargil Warfare 1999

The Indian market confirmed resilience and skilled a slight decline of 0.8 per cent from Could 3, 1999, to July 26, 1999, throughout the Kargil struggle.

“Based mostly on historic precedent and present world danger pricing, even within the occasion of a considerable escalation, we consider the Nifty 50 is unlikely to appropriate greater than 5–10 per cent. Buyers at present following the 65:35:20 technique ought to preserve the allocation. Buyers who’ve any fairness hole within the portfolio ought to make investments now, thereby getting aligned to the strategic allocation of 65:35:20,” brokerage agency Anand Rathi mentioned within the report.

Disclaimer: This story is for academic functions solely. The views and proposals above are these of particular person analysts or broking corporations, not Mint. We advise buyers to test with licensed consultants earlier than making any funding selections.