Indian Stock Markets Open Lower Amid Escalating India-Pakistan Tensions
Indian stock markets opened lower due to rising tensions with Pakistan, but analysts highlight India’s military superiority and global economic factors keeping markets stable.
image for illustrative purpose
India’s domestic stock markets opened lower on Friday, as rising geopolitical tensions between India and Pakistan weighed on investor sentiment. Despite these concerns, market movements were relatively controlled, as India’s military superiority in the ongoing conflict ensured minimal disruption, analysts noted.
At 9:40 AM IST, the benchmark Sensex was down 0.68 per cent, losing 547 points to stand at 79,787.78, while the Nifty Index slid 0.79 per cent, falling 192 points to 24,081.50. The markets, however, remained buoyed by positive global cues, strong performances in Asian markets, and continued foreign investor inflows.
Under typical circumstances, such geopolitical developments would lead to a significant market downturn. However, two key factors have prevented a sharp decline. First, India’s strategic advantage in conventional warfare with Pakistan has been evident, reducing the likelihood of severe escalation. Second, the domestic stock market remains resilient, supported by robust global and economic factors, including a weak US dollar and potential economic slowdowns in the US and China.
India’s macroeconomic indicators continue to provide stability. Expectations of strong GDP growth this year, coupled with a decline in interest rates, further support the market’s strength. These factors have been pivotal in attracting Foreign Portfolio Investors (FPIs), who have been net buyers for the past sixteen sessions. On Thursday alone, FPIs purchased over Rs 2,000 crore, and so far this month, they have invested over Rs 11,500 crore in Indian equities.
Despite the ongoing conflict, market experts urge investors to avoid panic selling. “Even if the conflict intensifies, it’s crucial to stay invested and monitor developments,” said a veteran market analyst. Investors are advised to remain patient as the situation unfolds, as exiting the market at this point could lock in losses.
HDFC Securities’ Devarsh Vakil echoed this sentiment, advising traders to stay cautious and keep leveraged positions light. “It is important to hedge short-term risks rather than make speculative moves during this period of uncertainty,” Vakil added.
The military escalation saw India intercepting over 50 Pakistani missiles aimed at key border areas, along with shooting down four Pakistani aircraft. This development has triggered investor anxiety, leading to a potential rise in intraday market volatility.
Despite short-term volatility, analysts remain optimistic about India’s market prospects. Strong Q4 corporate earnings, the recent India-UK Free Trade Agreement, and continuous foreign investment inflows support long-term market growth. With global markets also showing positive trends, investors are encouraged to take a longer-term view.
