Market jittery following Operation Sindoor: What is the sentiment of investors?
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Published: May 07, 2025, 05:23 IST | Updated: May 07, 2025, 05:23 IST
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Discover how India's financial markets reacted to Operation Sindoor, with GIFT Nifty showing a bullish trend. Business & Economy | India News
Following India’s air strike under Operation Sindoor in Pakistan and Pakistan-occupied Kashmir on May 7, 2025, the Indian financial market experienced bullish momentum despite initial concerns over the potential fallout of the cross-border military action.
Indian financial markets are in an initial turmoil following the airstrike by the Indian Armed Forces. GIFT Nifty, a key indicator for Indian equities, started on an upward trend, trading at 24,446.5, marking an increase of 0.91%, trading up by 220 points. This reflects the bullish opening of Indian Equities today. This also implies institutional investors are expecting limited escalation and a swift containment of the conflict.
It is also to be noted that this resilience comes on the back of strong corporate earnings reported in the previous sessions and sustained FPI inflows in a few select sectors.
The Indian Rupee is facing downward pressure in the non-deliverable forward (NDF) market. It is expected to perform weaker against the US Dollar. This reflected heightened geopolitical tensions following Indian airstrikes under Operation Sindoor.
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The parallel can be drawn with the past events, such as the 2019 Balakot air strikes, where NIFTY 50 experienced a modest 1.8% decline, suggesting that markets often stabilise even after initial volatility if further escalation is avoided. The sharpest market correction was during the Indian Parliament attack on December 13, 2001, by -13.9%.
Investors are eager about statements from the Indian government, military and diplomatic channels to monitor the possibility of further escalation or resolution.
Sectors such as defence, aviation, energy and gold-linked investments are likely to remain in focus.
With trading sentiment delicately balanced between geopolitical developments and economic fundamentals, markets could swing in any direction.