The Indian stock market has experienced heightened volatility due to escalating tensions between India and Pakistan following the Pahalgam terrorist attack. Here are the key impacts:
Market Reaction
- Sensex & Nifty Decline: The Sensex dropped over 850 points, and Nifty fell below 24,000 in intraday trade.
- Investor Sentiment: Investors have turned cautious, avoiding long positions due to uncertainty.
- Sectoral Impact: Defensive sectors like IT and FMCG have shown resilience, while realty, healthcare, energy, and metals have faced selling pressure.
Geopolitical Influence
- Indus Water Treaty Suspension: India’s decision to suspend the treaty has increased concerns about a potential military confrontation.
- Cross-Border Tensions: Reports of cross-border firing have further fueled market uncertainty.
Historical Trends
- Limited Market Impact: Past India-Pakistan conflicts (Kargil War, Uri attack, Balakot strike) led to only minor corrections of 1–2%.
- Short-Term Volatility: Analysts expect a 5–10% correction at most, with any dip likely being short-lived.
Investor Strategy
- Stay Disciplined: Experts advise maintaining strategic asset allocation rather than panic selling.
- Buying Opportunities: Some investors may use the dip to enter quality stocks at lower valuations.
Source -Business today/MSN
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