5-10% Stock Market Correction Ahead? What 4 Major India–pak Conflicts Since Kargil War Suggests

A crisp rally successful nan banal marketplace suggests investors are not factoring successful immoderate awesome escalation successful nan India-Pakistan tensions. But if history is to spell by, nan mean equity marketplace correction owed to past 23 conflicts globally was 7 per cent, pinch nan median correction opinionated astatine 3 per cent, said Anand Rathi.

The home brokerage took into relationship 4 awesome India–Pakistan confrontations since Kargil War of 1999 and 19 different warfare aliases war-like events involving G20 countries complete nan past 25 years. 

"The heightened uncertainty relating to Indo-Pakistan tensions will measurement connected nan markets. It is very difficult to judge really overmuch nan marketplace has discounted. Going by nan resilience of nan market, it tin beryllium said that nan marketplace has not discounted a script of nan tensions culminating successful a warfare betwixt nan 2 countries," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

Anand Rathi, however, noted that moreover successful nan arena of a important escalation, nan Nifty improbable to correct much than 5–10 per cent. This presumption is based connected humanities precedent and nan existent world consequence pricing, nan brokerage said. 

Anand Rathi noted that isolated from during nan Parliament onslaught successful 2001, Indian equity markets did not correct much than 2 per cent during periods of precocious hostility pinch Pakistan.

"Even nan correction during nan Parliament onslaught (2001-02) was apt driven much by world factors, peculiarly nan 30 per cent diminution successful nan S&P 500 astir nan aforesaid period," it said.

The Kargil warfare started successful  May 1999 and concluded successful July 1999, pinch nan Nifty falling a specified 0.80 per cent. In nan lawsuit of attacks connected Indian Parliament successful December 2001, nan India-Pakistan tensions dropped 13.9 per cent. The 2016 Uri onslaught and surgical strikes later led to a 2 per cent driblet successful Nifty complete September 18-29, 2016. The 2019 Pulwama onslaught and Balakot airstrike successful 2019 complete Fedruary-March 2019 led to 1.8 per cent driblet successful nan NSE barometer. 

Anand Rathi said banal investors presently pursuing nan 65:35:20 strategy should support their banal allocations, adding that investors who person immoderate equity spread successful nan portfolio should put now, thereby getting aligned to nan strategical allocation of 65:35:20 strategy. 

Published on: Apr 28, 2025 3:19 PM IST