It was not a surprise when the Stock markets ended at an intraday low after the news of India’s recent Surgical strike arrived.
India, 12 days after the Pulwama attack, had crossed the Line of Control (LoC) to launch 1000kg bombs on a terror camp in Pakistan. The impact? The stock market, which factored in most negatives, still closed on a higher mark than the opening levels.
A sentimental impact?
However, many are calling this the sentimental impact of such news and hence, short term. This is said to not have any long-term material impacts and should be seen as an opportunity to enter the market or buy stocks at a low price.
The history agrees..
Moreover, history has been on the positive side. It shows how there have been lows but there have been highs for the investors. Think of the Kargil War or the Mumbai terror attack.
“During the Kargil war period, the leading indices of Indian stock markets showed an initial decline but strong recovery thereafter. The Sensex and Nifty declined 286 points and 79 points in initial 3 trading days, but recovered strongly thereafter and ended higher by 652 points and 191 points when the conflict ended. The overall impact of the Kargil war thus was actually market positive. The economy grew at the same pace in 1999-2000 as the year before – a healthy 6.5%,” says Soumya Kanti Ghosh, CEA, SBI.
Stage for Wealth creation.
Moreover, such incidents might give one the opportunity to get involved in wealth creation. For example, if you invested 1lakh rupees in L&T during the Kargil war, you would have that at 32,70,000 crore rupees today. What it means? A plausible long term stability even though short term ups and downs were seen.
Moreover, this strike has ensured sentiments in check when it comes to elections, 2019. People have a strong sentiment towards the reality of Modi 2.0 which reduces tons of speculation and doubts in the share market which might lead to further stability.
And well this is the very nature of Stock market, the climbs, and the drops, it’s just a different ballgame every day.