Indian equity indices Nifty 50 and Sensex settled at the day's high, swinging to the green from the red as the domestic equity markets showcased 'resilience' following the blasts in Delhi. After falling nearly half a percent in the morning session, the benchmarks clawed back losses to close almost half a percent higher.
At close, the Sensex was higher by 364.43 points or 0.44 percent at 83,899.78, and the Nifty was up 121 points or 0.47 percent at 25,694.95.
According to experts, the blasts will not have much of an impact on the markets. "Markets are typically quite resilient to such incidents since based on the experience of last several years. Such an incident looks like an isolated one," noted Vikas Gupta, Omniscience Capital.
Indian markets are showing remarkable resilience and maturity at this point, said Kranthi Bathini, WealthMills Securities. "The recent terror attacks are unlikely to have any significant impact on corporate operations or profitability, unless there is a major escalation that triggers a broader geopolitical event. Barring such developments, markets are expected to remain steady and well-balanced."
Gupta further added that as long as markets see a strong response from the security agencies to investigate and punish such incidents quickly, along with measures for preventing future such incidents, markets will focus more on the economic data and less on these.
Gaurang Shah, Geojit Financial Services did make a note that the markets are waiting for clarity on the Delhi blast investigations before taking a firm direction. "If a Pakistan angle emerges, the government’s response could be similar to Operation Sindoor, since it has already stated it wouldn't differentiate between state and non-state actors," he said.
Geopolitical risk is already priced into Indian market valuations for foreign investors. Domestic retail investors have lived through the assassinations of two prime ministers, multiple armed conflicts with Pakistan, and frequent terror attacks, as per market expert Ajay Bagga. As a result, markets are looking past the Red Fort blast for now and focusing instead on the more optimistic cues.
Instead of the blasts, the markets are eying the Fed event later today, while expectations around exit polls and progress on the trade deal are adding to the positive sentiment. With FPIs holding short positions of about 1.56 lakh contracts, the market remains cautious yet resilient, said Mayuresh Joshi, Director - Research, MarketSmith India.
What happened?
A high-intensity explosion ripped through a slow-moving car at a traffic signal near Delhi's Red Fort metro station on November 10 - leading to 13 deaths and many injuries. The blast occurred around 7 pm at the Subhash Marg traffic signal, damaging nearby vehicles and prompting a nationwide alert.
Delhi Police said that the car, in which the blast took place, had three occupants, adding that they are also probing if it was a suicide bomber attack. Further, the police registered an FIR under the Unlawful Activities (Prevention) Act and the Explosives Act in connection with the deadly blast. The national capital has been placed on high alert with strict vigil being maintained at the airport, railway stations and bus terminals.
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