Despite global conflicts, Indian equities have remained strong over the past 15 years, as per a recent report. During events like Operation Sindoor or the 2011 Middle East unrest, there have been notable declines in the Indian stock market. However, Indian equities have consistently recovered and shown resilience post major global conflicts, states a report by Axis Asset Management.
Amid the recent US–Israel–Iran tensions, global equity markets have experienced negative performance following missile strikes. Despite short-term market volatility triggered by wars and geopolitical conflicts, Indian equities have historically not sustained underperformance, especially when conflicts are regional, the report highlights.
The trend over the last 15 years reveals that conflict-induced market declines are usually short-lived, with long-term returns being influenced by factors like earnings growth, liquidity, and domestic demand. The ongoing US–Israel–Iran conflict, though significant geopolitically, is not unprecedented for Indian investors. Ashish Gupta, CIO of Axis Mutual Fund, advises long-term investors to remain invested, diversify sensibly, and capitalize on market declines during geopolitical stress.
Investors who have previously sold equities during conflict-driven market dips have often missed out on subsequent recoveries, which have sometimes occurred swiftly, Gupta added.
