Indian Stock Market During War
Historically, the Indian stock market has shown resilience during geopolitical conflicts, including wars. While short-term volatility is common, long-term trends often stabilize as investors adjust to the situation.
Stock Market Behavior During Wars
- 1999 Kargil War – The Sensex surged 37% during the conflict, outperforming global indices. Investors focused on large-cap stocks with strong fundamentals.
- 2001 Parliament Attack – The market saw a 14% decline, but this was largely influenced by global factors, including a downturn in the S&P 500.
- 2016 Uri Attack & Surgical Strikes – The market corrected by 2.1%, but quickly rebounded.
- 2019 Pulwama Attack & Balakot Airstrike – The Nifty 50 fell 1.8%, but stabilized within weeks.
- Recent India-Pakistan Tensions (2025) – Despite uncertainty, the Sensex and Nifty 50 gained nearly 1%, reflecting investor confidence in India’s economic stability.
Key Takeaways for Investors
- Short-term volatility is expected, but long-term resilience is common.
- Defense, infrastructure, and large-cap stocks tend to perform well.
- Market corrections during conflicts have historically averaged 7%, with a median correction of 3%.
- Strategic investors often use dips as buying opportunities.