Tensions between India and Pakistan have again raised concerns, especially among stock market investors. With reports of cross-border strikes and military action, many wonder how these events could impact the market in 2025.
History tells us that the Indian stock market reacts sharply during sudden military conflicts but recovers soon after. You might feel nervous if you’re a mutual fund investor, primarily through SIP (Systematic Investment Plan). But experts suggest not to panic.
Sensex During Past India-Pakistan Conflicts
Let’s look at how the Sensex behaved during the past major conflicts between India and Pakistan:
1999 – Kargil War
- The Sensex fell by 12% from May to July. Once the war ended, the market jumped by 18%.
2001 – Indian Parliament Attack
- The index fell by 9% but recovered within 4 months.
2016 – Surgical Strike by India
- The Sensex dropped slightly (around 3% intraday) but recovered in 2 days.
2019 – Balakot Air Strike
- Markets fell 1.5% intraday, but the Sensex ended higher by the closing.
In total, India has seen over 11 significant tension episodes with Pakistan. In 8 out of those 11, the market showed a drop, but recovery was always quick.
2025: What Investors Should Know
Market experts say that panic is not needed right now. The real impact on the market will depend on how the situation develops. The market might drop temporarily if the conflict doesn’t escalate too much.
Historical trends show that investors lose money only when they act in fear. Short-term declines during such tensions are expected, and markets often bounce back once things settle down.
What SIP Investors Should Do Now
If you invest in mutual funds through SIP, you should continue your investments without any changes. SIPs work on the rupee-cost averaging method, which means you buy more units when prices are low and fewer when prices are high. This lowers the average cost in the long term and helps reduce risk.
Volatility is a part of equity investing. Experts suggest that rather than stopping SIPs or withdrawing funds in fear, investors should stay invested. Such decisions help build long-term wealth and avoid converting short-term losses into permanent ones.
Disclaimer:
Stock market investments are subject to market risks. Past performance does not guarantee future returns. Investors should consult a financial advisor before making decisions.
Sources: TV9 Hindi, Association of Mutual Funds in India (AMFI), BSE Data
