Rising India-Pak tensions not good news for already reeling rupee, bonds

Nervousness ratcheted up Wednesday after Pakistani fighter jets struck at targets inside Indian-controlled Kashmir, prompting both nations to close down large swathes of airspace

The spike in tensions between India and Pakistan couldn’t have come at a worse time for assets in the world’s fastest-growing major economy, which is battling headwinds from a rebound in oil prices to the uncertainty surrounding the upcoming elections.

The rupee has gone from being the best-performing Asian currency last quarter to the worst this year, sovereign bonds are set for a second month of declines and equities have sat out the rally that’s driven Asian stocks to a four-month high.

The nervousness ratcheted up Wednesday after Pakistani fighter jets struck at targets inside Indian-controlled Kashmir, prompting both nations