Operation Sindoor: After Operation Sindoor, prolonged war and stress with Pakistan may have a negative impact on the Indian stock market. Analysts believe that if the action is limited to the selected goals and the stress is reduced, then improvement can be seen over time.
Anirudh Sarkar, Chief Investment Officer of Quest Investment Advisors, said that history suggests that Indian markets have often performed well during any conflict with Pakistan on the border and then. This time also is nothing different.
The government said, “Despite the geopolitical concerns that have been released for the last two weeks, foreign institutional investors (FII) are investing in our markets. It shows our economic strength in a short term. Any military action that is limited to specific goals and ends in a few days or weeks, will not have any negative effects on our economy or markets. A long struggle, which is a long struggle, has a long struggle. Can affect it as they would like to avoid risk. ”
India’s major action against terrorist camps in Pakistan
In response to the terrorist attack in Pahalgam on 22 April, the Indian Army attacked the terrorist infrastructure in Pakistan and Pakistan -occupied Jammu and Kashmir (POJK) on midnight of May 6 and 7. 26 civilians were killed in a terrorist attack in Pahalgam. Historically, the Indian stock markets have reacted strongly to geopolitical tensions in the short term. But as soon as uncertainty decreases, they recover immediately.
For example, there was a huge decline in the market during the Kargil War between India and Pakistan in mid -1999. However, when it became clear that this struggle would be short -lived, the market rapidly jumped.
Which areas will be affected by Operation Sindoor?
VT Market market analyst Ankur Sharma said that the government’s defense spending increases during military operations. This increased the shares of defense companies like Hindustan Aeronautics (HAL), Bharat Electronics (BEL) and Bharat Dynamics. At the same time, foreign institutional investors (FIIs) play an important role in the Indian market.
Sharma said, “Foreign investors can withdraw capital at the time of any regional tension or uncertainty. This creates short-term selling pressure in the stock market. Due to increasing concerns, investors turn to safe-loop properties like gold and US dollars. This leads to increase in gold prices and leads to some weakness in Indian rupees.”
Independent market analyst Ambareesh Baliga believes that if the operation is limited to a band/region with vermilion target attacks and ends soon, the market will get good recovery. He said, “If the current struggle increases, uncertainty will dominate the market. At the moment, it will be a strategy to wait and watch. The market has seen a good boom even after Balakot.”
