Wars in geopolitically sensitive regions affect stock markets around the world. From the Kargil War to the Israel-Hamas War, let’s look at the impact of wars on the Indian stock market.
Right before the Kargil War, the NIFTY50 declined about 13%. However, during the conflict, the index surged by 41% and continued its recovery after the war.
The market rallied for a week after the war broke out, but uncertainty in oil prices led to a pullback of -6.3% and -4.38% in the NIFTY50 and SENSEX over the month, though the quarter ended positively.
In 2020, Azerbaijan recaptured territory in Nagorno-Karabakh from Armenia. This conflict had no impact on India, and the markets ended on a positive note with the NIFTY50 rallying 24% during the quarter.
On the day of the war, global sell-offs caused the Indian market to tank, with NIFTY50(-4.78%) and SENSEX (-4.72%) taking their largest hit since May 2020.
The Indian market remained resilient weeks following the war, though faltering after a month due to rising oil prices and rupee volatility. However, the markets ended the quarter on a positive note.
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