Anil Singhvi’s stock market outlook amid India-Pakistan conflict

In a major escalation, India’s Army, Navy, and Air Force launched joint precision strikes on nine terror hubs in Pakistan and PoK early on Wednesday, the first such move since the 1971 war, following the Pahalgam’s horrific terror attack that killed 26 civilians. And calling it an áct of war, Pakistan has vowed retaliation. 

So, now as Indian markets hinge on development in the military escalation with Pakistan, here is Zee Business Managing Editor Anil Singhvi’s view:

How much does the market fear war?

Anil Singhvi anticipated a lower opening for the Indian equity benchmarks today after India lauched Operation Sindoor. Nonetheless, he foresees the market’s reaction to be very limited for now. This is even as he believes the next move in the market will come based on two triggers:

• If there is more action from India. For now, the retaliatory strike by India was already known and discounted by the market. 
  
•  Pakistan’s reaction to the precision strikes by India.

As we write, Nifty50 is trading rangebound, holding on to 24,300 levels, with a minor drag.

How much can the markets fall amid the India-Pakistan conflict?

Commenting on the market’s outlook amid the war-like situation between India and Pakistan, Singhvi noted the following:

• During the surgical strikes after the Uri attack in 2016, Nifty dropped by 156 points.
• Nifty fell only by 44 points in 2019 on Balakot air strikes.

He added that in case tensions didn’t escalate further, markets recovered in the next one or two days.

The blue-chip Nifty index rose one-sidedly by 2,850 points, while the Bank Nifty, in a similar fashion, gained 6,900 points. And following this, it is normal to have a correction of one-third of the increase.

Nifty support levels 

Singhvi views 23,800-24,000 as a very strong support for Nifty, with an indication of weakness only if the benchmark closes below 23,800.