Equity markets stared down the barrel - but now, the trigger's pulled

Bordering on peace tested: Past shots fired, but this bullet strikes closer to home

India’s equity markets have weathered 11 past flare-ups with nuclear-armed neighbour Pakistan with little lasting damage.

 

According to Anand Rathi, the sharpest fall — 14 per cent during the 2001 Parliament attack — was largely driven by global headwinds. Indian equities even outperformed the S&P 500 during that period. The full-blown Kargil War saw no correction, and foreign portfolio investors (FPIs) kept buying through both events.

 

But the current escalation — marked by open hostilities and advanced weaponry — could test that resilience. After holding steady, markets wobbled on Friday: the Sensex and Nifty fell over 1 per cent, and FPIs offloaded ₹3,800 crore in shares after 16 straight sessions of inflows totalling nearly ₹50,000 crore. 

 

Analysts observe that the ceasefire is a welcome relief, but had the conflict dragged on, the impact could have spilled into the real economy, denting growth and investment.