'Markets.. Set to Recover Smartly Today': Market Expert Ajay Bagga Amid India-Pakistan Tensions

Stock Market Today: Last week was gripped by a major geopolitical crisis after 26 Indian tourists were killed in Pahalgam on April 22 in an attack attributed to The Resistance Front (TRF), a Lashkar-e-Taiba affiliate. In retaliation, India launched Operation Sindoor on May 7, conducting precision airstrikes on terror launchpads in Pakistan and Pakistan-occupied Kashmir (PoK).

Pakistan retaliated with cross-border shelling, prompting India to target eight Pakistani military bases. The swift escalation raised fears of a broader armed conflict.

Ceasefire Halts Conflict - Briefly
Amid global concerns, the United States facilitated a temporary ceasefire. However, Pakistan reportedly violated it within hours, reigniting volatility in the region. Despite the fragile peace, financial markets are now showing signs of resilience.

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Markets Show Strength, Set for Rally
Market expert Ajay Bagga noted that global cues are encouraging, especially as the US and China reported “productive and positive” trade talks in Geneva over the weekend. “Indian futures are pointing to a sharp 2% upmove, as all the losses due to the India-Pak kinetic conflict are made up on the back of the cessation of active hostilities in the region,” said Bagga.
He added, “Indian markets weathered the turbulence quite well and are set to recover smartly today.”
 

Global Factors Boost Investor Sentiment
Asian markets opened higher amid US-China optimism. Gold fell over 2%, oil prices rose, and the US dollar strengthened. US futures also point to a 1% uptick.
Bagga highlighted that pharma stocks may face pressure, as US President Donald Trump is expected to sign an executive order reducing prescription drug prices by 30–80% on Monday at 9 AM ET.

Tourism Hit, Defence Stocks Gain
The tourism industry in North India has taken a major hit, with mass cancellations during the peak summer holiday season. In contrast, defence stocks are seeing renewed investor interest on expectations of fresh procurement orders amid heightened security concerns.

‘Overall , tourism in North India is the biggest impacted sector with mass cancellations in the peak summer holidays season impacting important tourist hubs. Defence stocks should see buying interest with fresh orders expected,’ Baga said. 

Outlook: Resilient, But Fragile
Despite the geopolitical risks, both Foreign Portfolio Investors (FPIs) and Domestic Institutional Investors (DIIs) remain net buyers. “Sentiment remains fragile geopolitically,” said Bagga, “but the resilience of the Indian markets points to a potential strong rally in the near future.”