India-Pakistan conflict: Indian indices edged slightly lower at the open amid rising geopolitical tensions, after India conducted strikes on nine locations in Pakistan in response to last month’s attack in Kashmir.
The BSE Sensex stood at 80,596, down 0.06%, and the Nifty 50 also dipped 0.06% to 24,366 in early trades.
However, the market took a U-turn, failing to dent investors sentiment with the BSE Sensex climbing 70 points to 80,710 and the Nifty 50 gaining 10 points to reach 24,403.
Here’s how Indian stock market behaved during five India-Pakistan wars –
The Nifty 50 has typically shown resilience during previous episodes of heightened tensions between India and Pakistan, with market downturns being relatively mild—averaging a drawdown of just 5.27%, according to report by Bajaj Broking’s Market Outlook report.
“Exceptions to this trend include the 2001 Indian Parliament attack and the 2008 Mumbai Taj attacks, where the market fell more sharply—though much of that drop was due to global economic factors rather than the conflicts themselves. Overall, this shows that investors tend to look past short-term geopolitical events and focus more on the broader economic outlook,” the brokerage firm said.
This indicates that while short-term volatility is present, the market tends to recover and even deliver solid gains over the medium term.
1. Pulwama Attack 2019
As per Anand Rathi report, the Indian stock market responded negatively following the Pulwama attack in 2019, with Indian indices dropping more than 1.8 per cent from February 14 to March 1.
2. Uri Attack and Surgical Strikes 2016
The Indian market fell more than 2 per cent between September 18 to September 26. While the terrorists attacked an Indian Army base near Uri in Jammu and Kashmir, the Indian government responded strongly by launching a surgical strike, targeting terrorist launch pads across the Line of Control in Pakistan-occupied Kashmir.
3. Mumbai 26/11 terror attack 2008
The Indian market witnessed a positive move despite Mumbai being under siege in 2008. During the two days of the attacks, the Sensex climbed by around 400 points, while the Nifty gained 100 points.
4. Indian Parliament Attack 2001
The attack on the Indian Parliament in 2001 led to a knee-jerk reaction for the Indian benchmark indices, but as reports of the situation coming under control surfaced, both Sensex and Nifty recouped their losses. While the Sensex ended 0.7 per cent lower, the Nifty ended 0.8 per cent down.
5. Kargil War 1999
The Indian market showed resilience and experienced a slight decline of 0.8 per cent from May 3, 1999, to July 26, 1999, during the Kargil war.
“Based on historical precedent and current global risk pricing, even in the event of a substantial escalation, we believe the Nifty 50 is unlikely to correct more than 5–10 per cent. Investors currently following the 65:35:20 strategy should maintain the allocation. Investors who have any equity gap in the portfolio should invest now, thereby getting aligned to the strategic allocation of 65:35:20,” brokerage firm Anand Rathi said in the report.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
