Will India-Pak Tensions Impact Stock Market on Monday?

Impact on Stock Market: Due to mounting geopolitical tensions between India and Pakistan, which eroded investor confidence and drove indices lower, the Indian stock market broke its longest weekly winning streak of 2025.

Impact on Stock Market:

Growing border tensions caused considerable volatility in the Sensex and Nifty 50, two important domestic benchmarks. Following a horrific incident in Kashmir last month, India launched attacks on terrorist camps in Pakistan on Wednesday, sparking the start of the battle. The two nuclear-armed countries continue to engage in cross-border interactions as a result of Pakistan’s response to the strikes.

Rising geopolitical tensions between India and Pakistan following reports of drone and missile strikes were a major factor in this week’s sharp drops in the main equity indices. Following the Indian Army’s confirmation of multiple overnight drone and missile attacks by Pakistani forces, which heightened fears of a possible escalation, the market decline intensified on the final trading day of the week.

How Indian Stock Market Likely to Perform:
Market analysts predict that markets will respond favorably to the strategic victory against terrorism. India has achieved a major diplomatic and strategic win in its war against terrorism with the announcement of a complete and immediate ceasefire between India and Pakistan, mediated by the United States. Financial markets are likely to view this de-escalation as a significant positive event since it eliminates a significant negative impact on investor mood.

Also Read: Why Pakistan Broke Ceasefire: 5 Possible Reasons

Important Technical levels:
According to the experts, a gap-up opening of 200–300 points on the key indices is anticipated. Nonetheless, volatility is probably going to continue due to the ongoing earnings season and worldwide uncertainty, particularly those pertaining to tariffs. As immediate geopolitical worries abate, buying demand in the defense and banking sectors may increase, and better sentiment may also help broader indices regain some of their recent losses from the previous two to three sessions.