Impact of Israel Palestine War on Indian Economy – An Event Study
Authors: Vashishth Ojas , Pandey Prof. Shiva Kant 
Published: February 2025

Background: Geopolitical conflicts and terrorism have profound effects at global market scenario in financial markets, uncertainties present in the market, confidence of the investors and their diversified market risk. Historically, dated 11 September, 2001 Russia-Ukraine war escalated, a day marked with unprecedented casualties and consequences which illustrates the complexed mixed play between various political interplay and financial stability. Further, October 7, 2023 Hamas attacks on Israel which lead to major geopolitical consequences . This event portrays that terroristattacks often results in market fluctuations, market volatility in relation to indicators such as location, scale and other economic context of the event. Objective:This paper investigatesthe role of Israel-Palestine conflict through various sectoral indicators present in the Indian economy through event study methodology. The study investigates conflict implications that has affected the whole sector, further helping foreign investors to make actionable insights for navigating global market uncertainties. Design/Methodology/Approach: The study covers fromperiod January 4, 2023, to November 7, 2023, which includes 167 days before and 20 days after the announcement of conflict, made use of data from the National Stock Exchange (NSE). In order to evaluate sectoral and temporal changes in market dynamics, the research uses the event study approach to examine cumulative abnormal returns (CAAR). Results & Discussion: The study highlights sectoral reactions of the Israel-Palestine conflict are shown by the data, with the metal, health care, IT, oil and gas, and pharmaceutical industries showing particularly encouraging developments. Notably, there areunfavourable trends in the automobiles financial services, FMCG, and real estate industries. The study delineates financial ramification and provides a detailed insight of the financial effects of the war by identifying winners and losers among industries.The research holds significant importance for analysts, politicians, and foreign investor. In times of political uncertainty, stakeholders may make informed decisions by identifying beneficiaries and losers as sector-specific implications. The study emphasizes how crucial it is to modify investment plans and government reactions in light of specific industry features.The findings contributes in wider spectrum through lens of geo-political events such as Israel-Palestine conflict that has affected the Indian economy byshedding lights onbeneficiaries and adversely affected industries,the research enriches significant contributions into the complexity of market responses to political events. Conclusion: This research underlines the interconnectedness of global market scenario in respect with financial markets. Through examining the financial aftermath of various events the study underscores valuable insights on geopolitical crises which is led by wars, terrorist , conflicts, and other economic vulnerability. These insights are quintessentially important for various people namely, investors, policymakers, organizations and financial institutions in uncertain global landscape which will guide them to navigate through these uncertainties and risk.