NEW DELHI — Indian equity markets have repeatedly demonstrated resilience during major global conflicts over the past 15 years, bouncing back from short-term corrections triggered by geopolitical tensions, according to a report released Monday by Axis Asset Management.
The report noted that domestic benchmark indices have historically faced sharp declines during periods of rising global tensions, including episodes such as Operation Sindoor and the 2011 unrest in the Middle East. However, despite initial sell-offs, markets have consistently recovered and delivered longer-term gains.
Amid the ongoing U.S.–Israel–Iran tensions, global equity markets have reacted negatively following missile strikes, continuing a pattern seen in previous geopolitical crises. According to the report, wars and regional conflicts typically generate short-term volatility but have not led to prolonged underperformance in Indian equities, particularly when the conflicts remain geographically contained.
The analysis emphasized that conflict-driven market drawdowns have generally been shallow and temporary. Over time, earnings growth, liquidity conditions and domestic demand have played a larger role in determining long-term returns.
Axis Asset Management said the current U.S.–Israel–Iran conflict, while serious, is not without precedent for Indian investors.
“Over the past 15 years, every major conflict has tested sentiment and almost every time, Indian equities have proven resilient. Markets may fall, currencies may weaken, and oil prices may spike. But fundamentals reassert themselves over time. For long-term investors, the most reliable strategy during geopolitical stress has remained unchanged: stay invested, diversify sensibly, and use periods of decline to add to existing holdings,” said Ashish Gupta, chief investment officer at Axis Mutual Fund.
The report also cautioned that investors who exited equity markets during earlier conflict-driven sell-offs often missed subsequent recoveries, in some cases within a relatively short period.
The findings underscore a recurring trend in Indian markets: while geopolitical events may unsettle investor sentiment in the near term, structural growth drivers have historically supported a rebound over time. (Source: IANS)
