Markets Demonstrate Resilience During Geopolitical Events

Historical Patterns Point to Recovery After Corrections

Mumbai, April 8: Indian equity markets have continued to display resilience in the face of geopolitical disruptions, with historical trends indicating consistent recovery following periods of sharp correction.

Corrections Typically Followed by Recovery Phases

Historical instances underline this pattern. During the Iraq War in 1990, markets declined by 14 per cent but rebounded with returns of 26 per cent within one month and 65 per cent over six months.

Similarly, the Kargil War in 1999 saw an 11 per cent correction, followed by gains of 17 per cent in one month and 40 per cent over six months. After the World Trade Centre incident in 2001, markets fell 18 per cent but recovered 45 per cent over a six-month period.

More recent developments mirror this trend. The Russia-Ukraine conflict in 2022 resulted in an 11 per cent correction, followed by a 7 per cent recovery in one month and 25 per cent over six months.

On average, corrections have been around 10 per cent, with subsequent returns of 16 per cent after one month and 37 per cent over six months. Median figures stand at an 11 per cent correction, followed by 17 per cent and 38 per cent recovery over one and six months respectively.