Despite increased geopolitical tensions after ‘Operation Sindoor,’ the Indian stock market has showed surprising resilience.
The military operation, which targeted nine terror hubs in Pakistan and Pakistan-occupied Kashmir (PoK), first led to a dip in pre-opening trade for Sensex and Nifty.
However, once trading started, both the indices quickly recovered and moved into positive territory by 9:45am.
Chief Investment Strategist at Geojit Financial Services, Dr. VK Vijayakumar, attributed the market’s stability to its focused and non-escalatory nature.
Foreign inflows, UK trade deal stabilize markets
Market stability
Vijayakumar said the market is unlikely to be affected by India’s retaliatory strike as it was already anticipated and factored in. Strong foreign fund inflows and a trade deal with the UK also provided support to the stock market, balancing out volatility from ‘Operation Sindoor.’
FII buying fuels market resilience
Foreign investment
Dr. Vijayakumar emphasized robust foreign fund inflows as a major reason behind the resilience of the market.
In the past 14 trading sessions, Foreign Institutional Investors (FIIs) have bought shares worth ₹43,940 crore.
These investors are betting on global macros such as a weak US dollar, slower growth in the US and China, and India’s relative outperformance.