On May 7th, India launched 'Operation Sindoor'—a series of precision strikes on nine terror-linked locations in Pakistan and Pakistan Occupied Jammu & Kashmir (PoJK). The bold move was a direct retaliation for the April 22 Pahalgam terror attack, which claimed 26 Indian lives.
But even as geopolitical tensions soared, the Indian stock market showed remarkable composure.
The Nifty50 traded flat near 24,350 points, while the Sensex hovered around 80,600. Interestingly, Nifty Auto gained 1%, while Nifty FMCG dipped 0.6%, indicating sector-specific momentum amid the uncertainty.
Experts suggest the calm is not misplaced. Aniruddha Sarkar, CIO at Quest Investment Advisors, noted that historically, markets have rebounded or even performed well during border skirmishes. Independent analyst Ambareesh Baliga agrees, saying a swift and localized operation could even lead to a smart recovery.
However, caution remains.
G Chokkalingam from Equinomics Research warns that retail investors could stay away due to rising tensions, leading small- and mid-cap segments to underperform. He recommends shifting focus toward large-cap stocks until clarity emerges.
VK Vijayakumar of Geojit Financial Services explained the resilience: “What stands out is the non-escalatory, precision-driven nature of the operation. FIIs have already priced in this retaliation. More importantly, they remain bullish due to favorable global macros—slowing U.S. and Chinese economies, a weak dollar, and India’s relative growth strength.”
Read more: India’s Operation Sindoor hits 9 terror bases in Pak, PoK | Hook News Brief
The real contrast, however, came from across the border. Pakistan’s benchmark KSE-100 plunged over 6,200 points—nearly 5%—after Operation Sindoor. Islamabad reported casualties and infrastructure damage from the strikes.
Bottom line? While markets remain steady now, any escalation could change the game fast. Until then, investors are watching closely—but not panicking.