ISSUE NO: 17
SEP-OCT
Impact of Surgical Strike on Indian Market
On 18th September 2016, Pakistan based terrorist group JeM attacked on
Indian army camp in Uri, Kashmir. Our 18 soldiers died in the attack. In
response to this, on 29th September, Indian army conducted surgical strikes
across the Line of Control.
Surgical Strike and Market
Now the question appears what is
the connection between Surgical
Strike and Market Behaviour? The
answer is various factors like
Sentiments, Emotions, Uncertainty
and risk affect the market. Stock
market reacts in very short time as
any sentiment is definitely going to
create uncertainty. In conditions
like war, surgical strike or
ceasefire, most of traders and
investors hit sell and pull out
money from market. Those who
want to invest postpone it till the
time market comes in stable
condition. Market don’t like
uncertainty of any type and thus
even if this is repeated in future,
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market may not show positive
signs.
History
The relation has been quite strong
between war/surgical strikes and
market.
During world
war
European market was devastated
whereas USA remained strong.
Last time India came closest to a
war was Kargil issue. At that time
also Sensex went down for short
period but as India remain strong
against Pakistan it gained around
40% in just two month time. So it
all depends on how much investors
show confidence in the market
even after such events
Surgical Strike Impact