India-Pakistan Strain: What It Means for Dalal Street and Foreign Investors
India and Pakistan have been battling for supremacy over tensions, with drone strikes reported near both sides of the border this Thursday. Although Indian markets are fairly stabil, the currency experiences the worst drop in two years, triggering worries about investment from abroad amid tensions that continue to rage.
India-Pakistan Strain: What It Means for Dalal Street and Foreign Investors
The India Pakistan tensions have risen for the second time in a row on Thursday, when Indian Army reported on Friday that the Indian Army reported on Friday that Pakistani Armed forces carried out multiple attacks using drone drones and other munitions across all of the western frontier in the night between the 8th and 9th of May.
This news comes just a few days following the day India demolished nine terror camp across Pakistan and the Pakistan-occupied Kashmir (PoK). The Pakistani military claimed India has conducted a string that included drone attacks within Lahore, Karachi, and various other areas.
The offensive by India was dubbed Sindoor, the name given to it by India's government Operation Sindoor occurred two weeks following the Pahalgam terror attack in Jammu and Kashmir where 26 tourists, mostly, were killed on the 22nd of April.
India-Pakistan standoff sparks concern over FPIS inflows continuity
In the midst of escalating India Pakistan conflict between two countries that share a border The Indian market has displayed little risk. Though benchmark indices started the trading day on Friday with sharp losses however, they recovered quickly in the initial hour of trading.
However, Pakistan's stock exchange has seen an ongoing decline, which has led authorities to stop trading because the indices continue to hit low circuit boundaries. While the stock market today has suffered only minor losses however, the Indian Rupee is under severe pressure.
The issue has prompted concerns from analysts who believe that the rapid decline in the rupee may dampen the sentiment of foreign investors, exactly since foreign investors have recently shifted their views regarding India's stock market.
Prashanth Tapse is the Senior VP (Research) for Mehta Equities Ltd, said, "There is a lot of trepidation in the markets because investors are concerned that the current tensions--if they becomes major conflicts between two nuclear-powered countries--could result in a massive sell-off of the equities market."
