India-Pakistan Tensions: How It Could Affect the Stock Market : April 27, 2025

India-Pakistan Tensions:Could Affect Stock Market:April 27,

Additionally, market analysts predict that during the coming days, the Indian market may become more volatile due to geopolitical developments between India and Pakistan.

 

Indian stock market: A terrorist incident in Kashmir has heightened geopolitical tensions between India and Pakistan, which has alarmed investors and resulted in some profit-taking. Experts predict that market sentiment may continue to be cautious due to the growing tensions.

Also Read : “Stock Market This Week: Key Gainers and Losers – The Market Movers You Should Watch” April 26, 2025

The Sensex and Nifty 50, two domestic equity indices, have increased by 1% during the last five days. The BSE Sensex and Nifty 50 both saw weekly gains of 0.80%, closing at 79,212.53 and 24,039.35, respectively. The India VIX rose 11%, partially reversing the previous week’s 23% decrease, as market volatility increased marginally.

 

 

Following a strong start bolstered by favorable global indicators, Indian benchmark indexes experienced a precipitous fall. Profit booking was the reason for this, as tensions between India and Pakistan increased across the border after the terrorist strikes in Pahalgam, Kashmir. At 24,039 (-0.9%),the Nifty finished down 207 points,according to Siddhartha Khemka,Head of Research,Wealth Management,Motilal Oswal Financial Services Ltd.

Khemka went on to say that yesterday’s advance in the tech-heavy US Nasdaq index helped Nifty IT,the exception,finish with gains of 0.7%. Since tourism is predicted to suffer following the attack on tourists in Kashmir, hotel and aviation stocks were under selling pressure.

 

 

What does history indicate?
According to Vinod Nair of Geojit Investments Ltd., India’s strong internal economy has historically allowed it to exhibit considerable resilience to geopolitical forces.

In the short term, foreign investors are probably going to take a wait-and-watch stance in order to assess the geopolitical situation. Given the robustness of the domestic economy, India has demonstrated significant resilience during geopolitical circumstances based on its previous performance. It is reasonable for long-term investors to view this as a chance to buy high-quality stocks or sectors during future declines in order to profit in the long run,Nair continued.

The geopolitical events between India and Pakistan,however,may increase market volatility in the coming days,according to market analysts.

The Anand Rathi research claims that during periods of increased tension with Pakistan, Indian equities markets have never had a correction of more than 2%, with the exception of the 2001 Parliament attack.

Even the 2001–02 Parliament attack correction was probably more impacted by external causes, particularly the roughly 30% decline in the S&P 500 at the time.

According to the data, the median correction in the equity market during conflicts was 3%, while the average correction was 7%.

Even in the case of a significant escalation, we think the Nifty 50 is unlikely to correct more than 5–10% based on historical precedent and current global risk pricing. Investors who are currently using the 65:35:20 method ought to keep their allocation in place. According to the research, investors with any equity gaps in their portfolios should make investments right away to align with the 65:35:20 strategic allocation.

In light of the war between India and Pakistan, how is the Indian stock market expected to perform?

Investors will keep a careful eye on any further military developments between India and Pakistan over the weekend because they will be crucial to Monday’s opening of the domestic market.

With a gap-up start to the week,Nifty surged above the pivotal 24000 mark. The index continued to rise steadily as the week went on.

Rising geopolitical tensions between India and Pakistan caused a steep sell-off on Friday,wiping out the gains from the previous week. Rajesh Bhosale,an equity technical analyst at Angel One,stated, “Thankfully,the bulls made a strong comeback in the latter part of the session,helping Nifty close with a modest weekly gain of 0.79%, just above the 24000 mark.”

Bhosale added that the Nifty has validated a robust bullish breakout on the charts by reaching the February-March swing highs. On Friday,the breakout zone between 23900 and 23800 offered vital support and is still a significant important level. A more significant correction into the 23500–23300 zone may occur if geopolitical tensions increase or if this support is compromised.

“On the upside, the 24250–24350 level represents immediate resistance, even though the overall trend is still optimistic. The major uptrend would be confirmed to continue if there was a rise above this zone. The subsequent wave of the advance might not be as seamless as the most recent surge, so traders should exercise caution and keep an eye on these crucial levels.

The Nifty Midcap Index also improved after encountering resistance at its 200 DSMA. He advised taking a cautious approach to midcap equities until this level is clearly exceeded.

Disclaimer: The sole intention of this story is education. The opinions and suggestions expressed above are not those of bharatbulletin24x7.com,but rather those of individual analysts or broking firms. Before making any financial decisions,we encourage investors to consult with qualified professionals.