17 hours ago
Indian equities will be reacting to the country's retaliation to the Pahalgam terror attacks, after the Indian Army, along with the Air Force, destroyed nine terror locations across Pakistan and Pakistan-occupied Kashmir in the early hours of Wednesday morning.
India's benchmark Nifty 50 index has opened 150 points lower on Wednesday, while the Sensex has declined by nearly 700 points. The indices have recovered their losses to trade around the flat line.
The Nifty 50 index had ended 80 points lower on Tuesday as well, as investors chose to remain on the sidelines, awaiting more clarity on the ongoing border tensions.
Foreign Institutional Investors have remained net buyers in the Indian equity markets now for 14 straight sessions, with another ₹3,800 crore net purchase figure on Tuesday.
Over the last 14 trading sessions, foreign institutions have poured in nearly ₹45,000 crore in to Indian equities.
In an interaction with CNBC-TV18, Arvind Sanger of Geosphere Capital Management said that foreign investors are less focused on the immediate risks and more on the macro factors. He did mention that immediate risks may cause knee-jerk reactions. "We are long-term believers in the India story," Sanger said.
"In the past, when such events have occurred, they have then de-escalated. So, assuming the most probable outcome is that the situation would de-escalate, we should not have much or any material impact or lasting impact on the markets," Prashant Khemka of White Oak Capital Management said.
"Investors just as we were discussing, are aware that in the past, when such events have happened, nothing of big significance has materialised. Obviously, they will also be taking the cue from the market. The market is down very substantially, then they will get jittery as well. But if the markets hold up, as in the past they have, the investors also would assume that this is something that's not going to be any different than what it has been in the past," he added.
Nilesh Shah of Envision Capital expects some consolidation in the markets, given that there were strong upmoves in March and April.
"But on the whole, after this upmove expect it to be basically now range bound maybe a couple of months from here, could be time zone of consolidation, and as corporate India stands to kind of benefit from lower crude oil prices, lower interest rates, all of that will begin to kind of get reflected in their margins," he said.
Shah pointed to a lot of positive factors including a buoyant rural economy, manufacturing activity at a 10-month high and others.
"These all auger well and point to essentially the times ahead. So yes, there would be consolidation, which I believe would be healthy from a medium to long term direction of the markets," he added.
This story will be updated with more views from market participants.
