Pakistan Can’t Act Now, Market Gets the Signal — Yet India Remains in Action Mode

India’s powerful military action against terrorist camps in Pakistan under Operation Sindoor not only sent a strong geopolitical message but also impacted the financial markets. After days of uncertainty following the Pahalgam terror attack, the Indian stock market rebounded sharply, while Pakistan’s stock market crashed amid growing political and military pressure.

India Targets 9 Terror Camps in Pakistan and PoK

On Tuesday, May 7, 2025, India conducted precision airstrikes on nine terror camps located in Pakistan and Pakistan-occupied Kashmir (PoK). This was a direct response to the Pahalgam terror attack that killed 25 Indian civilians and one Nepali national on April 22. The coordinated strikes were part of a joint operation by the Indian Armed Forces, targeting bases used by terror outfits like Lashkar-e-Taiba and Jaish-e-Mohammed. Intelligence for the strikes was reportedly provided by India’s external intelligence agency, RAW.

Also Read: ‘Jai Hind’, Asaduddin Owaisi welcomes strikes on terror hideouts in Pakistan

According to media reports, the airstrikes killed approximately 90 terrorists, dealing a severe blow to the operational strength of these groups.

Indian Stock Market Recovers Sharply from Day Lows

Following a weak opening, the Indian stock market showed strong recovery as clarity emerged over India’s decisive retaliation. Both the NSE Nifty and BSE Sensex bounced back from intraday lows.

• Nifty 50 touched a low of 24,220 but rebounded to trade above 24,350 by 11 AM.
• Sensex, which opened around 79,937, surged to 80,591, gaining around 35 points in early trade.

The recovery was fueled by market confidence that the situation was under control and a full-blown war was unlikely.

Pakistan Stock Market Crashes Post Strike

While Indian markets stabilized, the Pakistan Stock Exchange (PSX) suffered a massive crash. The benchmark KSE-100 index plunged around 6%, falling to 107,296, reflecting panic among investors amid fears of escalation.

Since the Pahalgam attack on April 22, the Pakistani index has lost nearly 10,000 points, highlighting economic instability.

Pakistan’s Defence Minister Admits: ‘We Will Not Respond’

Pakistan’s Defence Minister Khawaja Asif responded to India’s strike in a television interview, stating:

“If India doesn’t escalate further, we will do nothing.”

This unexpected declaration was widely interpreted as a pre-emptive surrender, signaling that Pakistan had no plans to retaliate. The Indian markets reacted positively to this development, interpreting it as a de-escalation signal.

Global Markets Rally, But India Showed Volatility

Despite a rally in global markets, including the US stock exchanges, Indian indices had remained volatile due to geopolitical uncertainty. However, India’s strong military response and Pakistan’s lack of counteraction gave investors renewed confidence.