India-Pakistan tension: What should investors do as Sensex, Nifty trade in red?

India Today

09-05-2025

Dalal Street opened in red as tensions between India and Pakistan have increased, and stock market investors are growing more cautious.Sensex and Nifty were trading in red, at the time the article was being written. This was expected after news of cross-border drone attacks and a sharp response from India raised concerns in the financial markets.At 9:43 am, the S&P BSE Sensex had fallen by 507.64 points to 79,827.17, while the NSE Nifty50 dropped 160 points to 24,113.80. Most shares and sectors were trading lower, with only a few managing to stay in the green.advertisement
"Stay invested, corporate profits are going to do well in the coming quarters and years also. So nothing to worry, stay invested and participate in India's growth story," said Kranthi Bathini, Equity Strategist at WealthMills Securities Pvt Ltd. INVESTORS ADVISED TO STAY CALMDr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said investors should not panic or sell in a hurry."Investors should not panic and exit from the market now. Remain invested, monitor the developments and wait for the dust to settle," he said.He explained that the market has not fallen as much as one would expect during such a situation. According to him, "Under normal circumstances, on a day like this, the market would have suffered deep cuts. But this is unlikely due to two reasons."advertisementVijayakumar pointed out that India has shown strong defence capability so far, and this could stop the conflict from escalating further. "The conflict, so far, has demonstrated India's clear superiority in conventional warfare, and therefore, further escalation of the conflict will inflict huge damage to Pakistan," he added.The second reason, he said, is the strong global and domestic economic position of India."The market is inherently resilient supported by global and domestic macros. Weak dollar and potentially weakening US and Chinese economies are good for the Indian market. The domestic macros construct is further rendered stronger by the high GDP growth expected this year and the declining interest rate environment," he said.Vijayakumar also mentioned that foreign investors have been actively buying stocks over the last sixteen trading sessions.VLA Ambala, Co-Founder of Stock Market Today, said that while the market has remained steady despite tensions, it is best to be cautious at this time."Despite ongoing tensions between India and Pakistan, our markets have shown resilience due to the relatively low impact of US tariffs and successful free trade agreements with major trade partners, including the UK," she said.She added that decisions by the US Federal Reserve have not had much effect on India's monetary policy. However, she urged investors to tread carefully. "Given the situation at the India-Pakistan border, I advise market participants to adopt a cautious investment approach during this phase," Ambala said.advertisementShe suggested that people who want to invest should wait for a small correction. "Those planning to invest should look for opportunities around a 4% to 5% dip in index levels," she said.She also pointed out that the India VIX, which measures market fear, had jumped nearly 10% during the day.To manage risks better, she recommended using hedging strategies. For long-term investors, though, Ambala believes that the overall trend is still positive. "For long-term investors, the major trend remains bullish," she added."Nifty could gain support between 24,200 and 24,050 and face resistance near 24,450 and 24,520. Similarly, Bank Nifty could gather support between 54,300 and 54,000 and meet resistance near 55,100 and 55,350," Ambala said."Based on the current price action and macroeconomic factors, I recommend that market participants adopt a sell-on-rise strategy," she said.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)Must Watch