The Indian stock market has experienced a notable shift, ending its longest winning streak of 2025 amid rising geopolitical tensions between India and Pakistan. The recent conflict, which escalated after India conducted strikes on terrorist camps in Pakistan and Pakistan-occupied Kashmir in response to a deadly attack in Kashmir, has caused significant fluctuations in major domestic indices, including the Sensex and Nifty 50. Investor confidence has been shaken, leading to a downturn in the market.
Geopolitical Tensions Impacting Market Performance
The stock market faced a turbulent week, largely influenced by the intensifying border hostilities between the two nuclear nations. The situation deteriorated further on the final trading day of the week, following reports of drone and missile attacks from Pakistani forces, which heightened fears of an escalation in the conflict.
- Key market indices: Sensex and Nifty 50
- Recent conflict start date: Wednesday
- Initial cause: India’s response to a terrorist attack in Kashmir
Expert Insights on Market Resilience
Despite this recent turmoil, market analysts emphasize the resilience of Indian equity markets. Vaibhav Porwal, Co-Founder of Dezerv, reassures investors: “While current events may be unsettling, history shows that Indian markets rebound over time. Those with well-diversified portfolios are likely to weather this storm without significant losses.”
Future Market Outlook Amidst Ongoing Conflict
Looking ahead, market experts are cautiously optimistic about the potential for recovery. The recent declaration of a “full and immediate ceasefire” signifies a strategic victory for India in its ongoing battle against terrorism. Prashanth Tapsi, AVP of Research at Mehta Equities, notes that this de-escalation could provide a much-needed boost to investor sentiment.
- Potential market reactions: Positive shifts anticipated following ceasefire
- Investor sentiment: Expected to improve with reduced geopolitical tension
Tapsi adds, “If stability is maintained over the next 24 to 48 hours, without any retaliatory actions, we could see a constructive response from the markets.”
Anticipated Market Movements
As the market looks to rebound, Tapsi predicts a gap-up opening of 200-300 points on the benchmark indices on the upcoming Monday. However, he warns that volatility may remain due to the ongoing earnings season and global uncertainties, particularly regarding trade tariffs.
- Key technical levels:
- Support: 23500
- Resistance: 24275/24401
The Nifty index is expected to maintain a position above 24000, with analysts suggesting that a fall below 23500 could trigger further selling pressure.
Sector Performance and Investor Sentiment
With the immediate geopolitical risks subsiding, sectors such as Defense and Banking are likely to attract renewed buying interest. Broader indices are also expected to recover from recent losses, driven by improving market sentiment. All eyes will be on Foreign Institutional Investors (FIIs), who turned negative during Friday’s trading session after a period of consistent net buying.
In summary, while the Indian stock market faces challenges due to the ongoing conflict, the potential for recovery remains strong, supported by strategic developments and expert insights into market dynamics. Investors are encouraged to keep a close watch on market movements and sector performance in the coming days.
