New Delhi, March 2 Despite major conflicts globally, Indian equities have proven resilient over the past 15 years, a report said on Monday.
Whenever geopolitical tensions rise, domestic equity benchmarks witness sharp corrections — whether during Operation Sindoor or the 2011 Middle East unrest.
Despite significant declines in the Indian stock market during such events, Indian equities have consistently bounced back and demonstrated resilience after major global conflicts or wars, according to a report by Axis Asset Management.
The key takeaway for investors who panic and sell their equities during conflicts such as the ongoing US–Israel–Iran tensions is to understand how the Indian stock market has historically performed during major geopolitical crises.
Amid the US–Israel–Iran war, global equity markets have shown negative performance following missile strikes.
Historically, this pattern has repeated several times over the past 15 years. Wars and geopolitical conflicts typically trigger short-term market volatility, but they have not resulted in sustained equity underperformance, particularly when conflicts remain regional, according to the note.
The pattern is consistent: conflict-driven drawdowns tend to be shallow and temporary, while longer-term returns are dictated by earnings growth, liquidity, and domestic demand.
It also noted that the US–Israel–Iran conflict is a serious geopolitical event, but for Indian investors, it is not unprecedented.
"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, CIO, Axis Mutual Fund.
Moreover, investors who exited equities during earlier conflict-driven sell-offs frequently missed the recoveries that followed sometimes within a relatively short span, he added.
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