With tensions soaring between India and Pakistan following Operation Sindoor, there is growing investor concern about potential market volatility. However, historical data suggests that Indian equity markets have remained relatively resilient during previous Indo-Pak conflicts.
According to Anand Rathi Research, here’s how Indian markets have reacted during past military escalations with Pakistan:
| Conflict | Start Date | End Date | Market Correction |
|---|---|---|---|
| Kargil War | 03-May-1999 | 26-Jul-1999 | -0.8% |
| Indian Parliament Attack | 13-Dec-2001 | 01-Oct-2002 | -13.9% |
| 2016 Uri Attack & Surgical Strikes | 18-Sep-2016 | 29-Sep-2016 | -2.1% |
| 2019 Pulwama Attack & Balakot Airstrike | 14-Feb-2019 | 01-Mar-2019 | -1.8% |
Notably, only the 2001 Parliament attack led to a double-digit market correction (-13.9%), largely due to its long duration and fears of a broader war. In all other instances—including the Kargil War and the 2019 Balakot airstrike—the Nifty corrected by less than 2%, reflecting the market’s ability to look beyond short-term geopolitical noise.
What about Operation Sindoor?
While Operation Sindoor (2025) has marked one of India’s most assertive responses post-Pulwama, early indications suggest a focused, limited engagement targeting terror infrastructure, not civilian or military assets. Based on past trends, Anand Rathi estimates that Nifty 50 is unlikely to correct more than 5–10% even in the case of a substantial escalation.
Summary:
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Mean correction across global conflicts: -7.0%
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Median correction: -3.2%
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India-Pakistan conflicts (excluding 2001): < 2% correction
History suggests that Indian markets typically absorb such events quickly, unless they evolve into prolonged or unpredictable wars. Investors are advised to monitor developments but avoid panic-driven decisions.
