Following the savage Pahalgam terror assault, tensions between India and Pakistan have escalated once again, yet Indian financial markets have proven resilient each time the two neighboring countries have clashed.

Despite investors’ initial hesitancy, historical patterns show that Indian markets have continuously surmounted geopolitical obstacles and come out stronger.

The Indian stock markets saw short-term drops but quickly recovered, demonstrating the underlying strength and trust in India’s economic development, whenever hostilities erupted along the Line of Control (LoC).

Consider the Balakot airstrike as an example. The Indian Air Force’s successful airstrikes on terror facilities in Balakot on February 26, 2019, after the Pulwama terror incident, caused the Sensex to drop 239 points and the Nifty to drop 44 points.

The Sensex, however, recovered quickly the next day, starting 165 points higher and finishing flat.

Similar to this, markets barely slightly reacted to the February 14, 2019, Pulwama assault, dropping 0.2% the next day. This underscores investors’ long-term faith in India’s stability.

Although there was a more severe decline after the Uri surgical strikes, with the Sensex dropping almost 400 points and the Nifty dropping roughly 156 points, the markets soon recovered in the sessions that followed, continuing on their solid upward trend.

The markets defied international predictions even amid the 2008 Mumbai terror events of 26/11. During that time, the Sensex rose by around 400 points and the Nifty gained almost 100 points, rather than declining.

Another notable instance of India’s economic tenacity was the Kargil conflict in 1999. The dispute lasted for about three months, yet during that time, the Sensex and Nifty both surged by more than 1,100 and 300 points, respectively, for gains of almost 33%.

While there is short-term volatility amid geopolitical tensions, historical evidence makes it abundantly evident that Indian stock markets have not only recovered but have prospered in the long run.

The Sensex increased by about 1,000 points, or 1.3%, during Monday’s intraday trading, while the Nifty increased by almost 300 points, or 1.2%, to close at 24,329, demonstrating the market’s consistent optimism in spite of geopolitical worries.