Despite the intensifying geopolitical tensions between India and Pakistan, Indian equity markets have shown remarkable resilience, with Dalal Street holding firm and investor sentiment remaining largely intact. While benchmark indices like the Sensex and Nifty fell over 1% in the previous session, market experts emphasize that the decline was modest given the gravity of the situation.
Key Takeaways:
1. Market Resilience Rooted in Fundamentals:
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Vinod Nair of Geojit Financial Services attributes the relative market calm to strong economic indicators like:
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Sustained foreign institutional investor (FII) inflows
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Record GST collections in April
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These fundamentals are acting as a buffer against geopolitical headwinds.
2. Supportive Global Factors:
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Weaker US dollar, stable crude oil prices, and progress on the India-UK FTA have improved the external environment.
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Optimism over US-China and US-UK trade talks is also adding to the global market stability.
3. FII Confidence Remains Intact:
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Despite tensions, foreign investors continue to bet on Indian sectors like textiles, automobiles, and IT — indicating underlying confidence in India’s growth story.
Volatility & Risk Management:
Ajit Mishra of Religare Broking points to:
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Elevated volatility, with India VIX surging
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Intraday swings in the Nifty, which closed at 24,008
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Broad-based selling, especially in real estate, while defence stocks like Bharat Electronics and HAL surged on expectations of higher defence spending
Mishra recommends:
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A hedged investment strategy
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Avoiding aggressive trades
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Maintaining a stock-specific focus amid the uncertain backdrop
Long-Term View: Stay Invested
Amit Jain (Ashika Global) and Vaibhav Porwal (Dezerv) provide a broader perspective:
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Short-term nerves are understandable, but long-term fundamentals remain robust
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Geopolitical shocks tend to result in temporary dips followed by strong rebounds
Porwal’s Historical Context:
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Post-2016 Uri attack → Markets rose 11.3% in one year
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Post-2019 Balakot strike → Up 8.9%
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Post-Kargil War → Up 29.4% in the following year
His advice:
“Stay calm, zoom out, and stay invested with a well-diversified portfolio. Indian markets have always bounced back stronger.”
What to Watch Next:
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Border developments and military escalations
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CPI & WPI inflation data
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Corporate earnings season outcomes
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Diplomatic signals from global powers mediating regional tensions
In essence, while markets are bracing for short-term volatility, long-term investors are holding steady, drawing confidence from India’s economic strength, reform momentum, and historical market resilience in times of conflict.
