Geopolitical tensions following the Pahalgam attack could trigger short-term volatility in Indian equities, but experts advise long-term investors to stay calm and look for buying opportunities.
April 27, 2025: The escalating India-Pakistan tensions following the Pahalgam terror attack have stirred apprehension in the Indian stock market, with experts warning of increased volatility in the days ahead.
Despite a broadly positive week, with Sensex and Nifty 50 gaining around 0.80% each, investor sentiment turned cautious on Friday after reports of fresh cross-border friction. The Nifty 50 closed at 24,039.35, and Sensex at 79,212.53, even as the India VIX — a gauge of market fear — rose by 11%, partially reversing last week’s sharp fall.
Also Read: China Backs Pakistan, Calls for Restraint After Pahalgam Terror Attack Tensions Escalate
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that “after a strong start, profit booking hit the indices due to rising India-Pakistan tensions following the Pahalgam attack,” adding that Nifty IT stocks bucked the trend, gaining 0.7% thanks to a tech rally on the US Nasdaq.
Hotel and aviation stocks were under pressure amid fears that the attack on tourists could dent India’s travel and tourism industry.
Also Read: Three Killed After Small Plane Crashes Near Tennessee Airport
How serious could the impact be? Historically, India’s markets have shown strong resilience to geopolitical shocks. Vinod Nair of Geojit Financial Services emphasized that “India’s robust domestic economy has helped it withstand such geopolitical pressures in the past.” He advised long-term investors to use any further dips to accumulate quality stocks for future gains.
A report by Anand Rathi added perspective: outside of the 2001 Parliament attack period, Indian equities have rarely fallen by more than 2% during Indo-Pak conflicts. Average corrections during such crises are 3–7%.
Even if the current situation escalates, Anand Rathi projects that Nifty 50 is unlikely to correct more than 5–10%. Investors following a 65:35:20 asset allocation strategy (equity:debt:gold) are advised to maintain discipline.
Key Levels to Watch Rajesh Bhosale, Technical Analyst at Angel One, noted that Nifty breached February-March highs and confirmed a bullish breakout. Immediate support is seen at 23,800–23,900 levels; breaching this could lead to a deeper correction toward 23,300.
On the upside, resistance is seen at 24,250–24,350. A strong move above this zone could re-ignite the primary uptrend.
Midcaps, meanwhile, faced resistance at their 200-day moving average, suggesting a cautious approach toward midcap stocks for now.
Looking Ahead All eyes are now on political and military developments over the weekend. Monday’s market opening will hinge heavily on how the India-Pakistan narrative evolves. While short-term turbulence cannot be ruled out, history suggests patient investors may find this an opportunity rather than a threat.
🏷️ Tags:
India Pakistan tensions, Indian stock market, Sensex, Nifty 50, Pahalgam attack, market volatility, geopolitical impact, investing strategy, Indian economy, Nifty support resistance levels