Indian financial markets will bounce back, and surgical strikes by the army to neutralise terror camps across the Line of Control (LoC) may even have a positive impact on the economy, India’s Finance Ministry said on Thursday.
“Terrorism is the biggest threat to our financial and economic stability, and growth. So, decisive action against terrorism will spur growth,” said Economic Affairs Secretary Shaktikanta Das soon after Finance Minister Arun Jaitley said India can repel any force that subverts peace. Das added, “Terrorism is the biggest enemy of growth. The decisive action taken by the government to fight the menace will have very positive impact on country’s economic and financial stability and growth.”
Lauding the strikes by the army, Jaitley tweeted, “We are proud of Indian Army for taking pre-emptive action and repelling terrorists’ attempt to destabilise peace and tranquillity in the region.” Even during the Kargil war from May to July 1999, leading indices of domestic stock markets had showed initial decline but recovered thereafter. Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services said: “There was panic liquidation on reports of developments across the LoC. But history has shown such events only have a short-term impact on financial markets and the recovery is often swift.”