Pakistan finds itself in deep turmoil—caught between external military defeat and internal economic collapse. Following a significant blow from the Indian Army’s Operation Sindoor, the crisis deepened on the home front as the Karachi Stock Exchange crashed by 7% on Thursday. The relentless slide forced authorities to halt trading altogether—an unprecedented and embarrassing move.
In sharp contrast, Indian stock markets remained largely resilient. While the day began on a tense note—with the Sensex falling over 500 points and the Nifty also dipping—there was no major crash. Despite the volatility, investor confidence in India remains intact. Here are the three major reasons why:
Confidence in India’s Military Strength
News of escalating conflict between India and Pakistan naturally rattled global markets. However, the Indian Armed Forces' proven capabilities and public trust in their strength have offered reassurance. Market analysts note that while geopolitical tension can crash any stock market, India’s overwhelming strategic and defense advantage over Pakistan has steadied investor nerves. With Pakistan’s economy already in shambles, few believe it can sustain prolonged conflict, giving India the upper hand.
A Robust and Fast-Growing Indian Economy
India’s economic fundamentals remain strong. Interest rates have been reduced, inflation is under control, and the country is charting rapid growth. A recent report from Kotak Alternate Asset Managers warns that global economic growth might slow down soon, particularly in countries like China and the U.S. However, India is expected to buck this trend. According to the IMF’s April 2025 World Economic Outlook, India is set to surpass Japan and become the world’s fourth-largest economy by GDP next year.
Continued Faith from Foreign Investors
Despite recent tensions, foreign investors have not backed away from India. In fact, for 16 consecutive trading sessions, they have continued pouring funds into Indian equities. This sustained investment shows the deep trust the global market has in India’s long-term economic potential and political stability. It's this confidence that has helped the Indian market avoid a sharp decline even amid geopolitical turbulence.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Stock market and mutual fund investments are subject to market risks. Always consult a certified financial advisor before making investment decisions.