Stocks to Buy | Prashant Khemka on market resilience amid border tensions
1/8
Market reaction
Following the escalation, the India Volatility Index (VIX) spiked 11%, and markets closed at the day’s lows. Prashant Khemka, in an interview with ET Now, said that such events typically trigger a knee-jerk reaction, but markets historically recover quickly once clarity returns.
2/8
Historical context
Prashant Khemka reflected on past border tensions, notably after the 1999 Kargil War, stating that similar incidents have usually de-escalated within days. While this situation appears slightly more intense, markets often respond before other sources reflect on-ground developments.
3/8
Current sentiment
Despite back-to-back 1% declines, the market behaviour suggests that investors do not expect the conflict to spiral out of control. Prashant Khemka highlighted that the current reaction is measured, and the market does not yet signal a deeper crisis.
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4/8
FII behaviour amidst tension
Foreign Institutional Investors (FIIs) have remained relatively steady in the cash market despite tensions. Prashant Khemka observed that while FII sentiment can shift quickly, their current stance shows confidence that the situation is manageable and not materially different from previous episodes.
5/8
Positive global developments
Prashant Khemka pointed to a series of positive developments in global trade, including the UK-India Free Trade Agreement and a new US-UK deal. These are signs of easing tensions on the global tariff front and contribute to a favourable backdrop for Indian equities.
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Sectoral opportunities
Even amidst geopolitical noise, investment opportunities persist. Prashant Khemka shared that sectors such as financials, healthcare, consumption, and technology continue to present value. His approach focuses on bottom-up stock picking rather than sector-level predictions.
7/8
Investor sentiment on India
Prashant Khemka noted that global investors generally avoid investing in conflict zones. Since India is a significant part of global portfolios, there is an inherent desire to see regional peace. While instability creates short-term caution, investors are still closely monitoring and not overreacting yet.
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Key takeaways
In conclusion, short-term volatility is expected, but long-term fundamentals remain intact. Prashant Khemka emphasised that unless there is a sharp escalation, the market is likely to stabilise. Meanwhile, positive global trade trends and earnings season offer a supportive backdrop.