On Friday, domestic stock markets opened lower due to rising tensions between India and Pakistan. However, despite the situation at the border, the markets did not face a major downturn, as India is seen to have the upper hand in the conflict, according to experts.
By 9:40 am IST, the Sensex was down by 547 points, or 0.68%, at 79,787.78, and the NSE Nifty was down by 192 points, or 0.79%, at 24,081.50. However, global markets were still performing well, and there were positive signs from foreign investors.
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Why Aren’t Markets Falling Further?
Normally, with such a situation, markets would drop significantly. But there are two key reasons why this didn’t happen:
- India’s Superiority: So far, India has shown clear strength in conventional warfare, and any further escalation is expected to cause greater harm to Pakistan.
- Strong Economic Factors: The market is being supported by strong global and domestic factors. The weakening US dollar, potential slowdowns in the US and China, and India’s expected high GDP growth this year are all positive for the Indian market. Additionally, the falling interest rates are helping investors.
These factors have kept investors confident, which is why foreign investors have continued to invest in Indian stocks. Over the last 16 trading days, foreign investors bought more than Rs 2,000 crore on Thursday and over Rs 11,500 crore this month so far.
Investors Should Stay Calm and Stay Invested
Experts are advising investors not to panic or sell their stocks if the situation worsens. They suggest staying invested, keeping an eye on the situation, and waiting for the tension to settle down. Some analysts also recommend being cautious with high-risk trades and using strategies like derivatives to protect against short-term risks.
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On Thursday, India’s defense systems intercepted over 50 missiles from Pakistan and shot down four Pakistani planes, increasing concerns and causing some market volatility.
Traders are advised to be careful and not rush to buy stocks just yet until there is more clarity about the situation. Even with short-term uncertainties, the long-term outlook remains positive, supported by strong corporate earnings, a new trade deal between India and the UK, consistent foreign investments, and positive global market trends.
