Despite rising geopolitical tensions after Operation Sindoor, experts advise investors to remain calm and stay invested. History shows that India’s markets have consistently bounced back stronger after similar conflicts.
Tensions have escalated between India and Pakistan following “Operation Sindoor” — a swift retaliatory strike by Indian forces targeting nine terror camps across Pakistan-occupied Kashmir.
While such geopolitical events often rattle investor confidence, historical data suggests that panic may be misplaced.
Two SEBI-registered investment advisors Aditya Hujband and Jeet Bhayani are urging investors to stay grounded. They recommend using this moment of volatility as a strategic window to realign portfolios rather than react impulsively.
Aditya Hujband (also known as MBA Investmentwala), emphasizes that while panic and market corrections are temporary, long-term growth remains a constant feature of the equity markets.
He points to historical evidence, noting that even during periods of national crises and heightened geopolitical tensions, markets have demonstrated a consistent ability to recover and reach new highs.
Drawing on past examples such as the Kargil War, Uri strikes, and Balakot airstrikes, Hujband notes that the Nifty index not only recovered but posted strong gains a year later.
He believes these patterns teach investors that episodes of short-term panic often create significant long-term opportunities. Corrections, in his view, are not endpoints but rather setups for future market advances.
His advice: “Stay invested, stay informed, and trust the power of time and compounding. Markets may wobble, but India's growth story marches on.”
Meanwhile, Jeet Bhayani advises caution in the current geopolitical climate, suggesting that traders either avoid short-term trades or proceed with heightened vigilance.
He recommends observing the market for a period to identify the most opportune moment for entry.
According to Bhayani, open interest (OI) data indicates that option sellers are active on both the put (PE) and call (CE) sides, which has resulted in only a modest increase in option premiums.
Despite elevated market sentiments, he remains optimistic about the long-term outlook.
Bhayani also notes that sectors such as pharmaceuticals and fast-moving consumer goods (FMCG) are well positioned to perform strongly under present conditions.
A recent note by Kotak Mahindra Mutual Fund titled Operation Sindoor: Time to Panic or Stay Put? echoes these views.
The report emphasizes that market drawdowns during previous military escalations have been short-lived. For instance, Nifty 50 gained 11.3% and 8.9% in the year following the Uri and Balakot events respectively.
Kotak’s stance is clear: India's long-term macroeconomic fundamentals remain strong, even if inflation and fiscal deficits temporarily rise during conflict periods. Their advice to investors:
- SIPs: Continue your systematic investment plans; consider topping up if you have a long-term horizon.
- Lump Sum Investments: Avoid panic moves. Instead, stagger your investments to take advantage of market dips.
“Short-term market swings are unsettling, but history shows they rarely derail India’s growth story,” the report notes.
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