Indian stocks plummet as threat of war triggers all-round selling Thursday Sep 29,2016

Indian stock markets posted their biggest decline since the Brexit vote on Thursday Sep 29,2016, after the army announced that it had carried out "surgical strikes" across the Line of Control (LoC) on suspected militants preparing to infiltrate from Pakistan-occupied Kashmir.

After the press briefing on the surgical strikes by Director General of Military Operations Lt Gen Ranbir Singh, the stocks plunged up to 4 per cent amid concerns that foreign investors, who have pumped in about Rs 50,000 crore into domestic equity so far this year, may exit the country in case hostilities escalate.

The benchmark Sensex plummeted by over 465 points, the biggest single-day fall in three months, after news of the strikes.

The 30-share benchmark index settled at 27,827.53, down 465.28 points, or 1.64 per cent - its biggest single-day fall since June 24 and weakest closing since August 26 when it closed at 27,782.25.

The 50-share NSE Nifty, which cracked below 8,600-level to hit a low of 8,558.25 during trade but managed to recover apart of the losses and settled down 153.90 points, or 1.76 per cent, at 8,591.25.

Note

What constitutes surgical strikes?

A surgical strike in military terms is an operation that is intended to take out a specific target, with no or limited collateral damage.

In Army’s terms, it is a fast operation carried out by a small unit, or it could be a well aimed missile. By the Air Force, it can be an aircraft targeting a single building or vehicle, as opposed to carpet bombing an area.

The strike across the LoC was reportedly carried out by Para Commandos and Ghatak platoons of the Indian Army. These are members of the Special Forces under the Parachute regiment who are trained specifically for such operations, and specialised teams part of infantry units. They are trained to parachute in to enemy territory and conduct precise missions, or to sneak in quietly across enemy lines. 

Surgical strikes are the alternative to sending in troops and tanks, creating a situation that could escalate to full-blown war. Governments often deny them or deal with the aftermath diplomatically.