Indian stock markets, including the Sensex and Nifty 50, are expected to open lower on May 7, 2025, following India's retaliatory strikes on terror camps in Pakistan and Pakistan-occupied Kashmir. The Indian Armed Forces launched 'Operation Sindoor' in response to the April 22, 2025, Pahalgam attack that resulted in 26 fatalities.
The SGX Nifty initially fell but recovered slightly as investors assessed geopolitical risks. Historically, India's equity markets have shown resilience to such events. For example, after the Balakot strikes on February 26, 2019, the Sensex and Nifty 50 experienced a temporary dip but quickly rebounded the next day.
Market experts suggest an initial negative reaction followed by a gradual recovery, contingent on whether the conflict escalates. Moody's has revised India's GDP growth forecast for 2025 to 6.3% due to global policy uncertainty and trade limitations, also citing geopolitical friction with Pakistan as a risk. Despite these tensions, the agency maintains a positive outlook on India's economic fundamentals for 2026.