India said it attacked terrorist camps in Pakistan late on Wednesday as Prime Minister Narendra Modi retaliated for a deadly strike against Indian soldiers earlier this month. Stocks, bonds and the rupee fell.
Heavy casualties were inflicted on militants assembled to infiltrate India, Director General of Military Operations Ranbir Singh said in a briefing in New Delhi on Thursday. The operations have now ended and no more are planned, he said, without elaborating.
“This is a very significant announcement,” Shashank Joshi, a fellow at the Royal United Services Institute in London, said in an e-mail. “India has conducted covert, retaliatory cross-border raids on many occasions in the 1990s and 2000s, but to prominently announce them is a provocative new approach. Depending on how far the Indians penetrated and the nature of the targets, these might also represent much more ambitious operations.”
Tensions between the nuclear-armed neighbors, who have fought three wars since 1947, have risen since a deadly attack on an Indian army camp in the disputed region of Kashmir that India blamed on Pakistan, though Pakistani leaders have denied involvement. Modi this week canceled a planned visit to Islamabad in November for a regional summit, and is reviewing possible diplomatic measures in a bid to isolate Pakistan.
Pakistanâs army is capable of defending its borders, Prime Minister Nawaz Sharif said on national television following Indiaâs announcement. He condemned firing across the de facto border that he said killed two Pakistani soldiers. The army said India started cross-border fire and it would respond to Indiaâs actions.
“This will create some short term jitters in the market,” said Abhimanyu Sofat, vice president at brokerage India Infoline Ltd. in Mumbai. “Investors are selling amid uncertainty on the extent or duration of the actions. If Pakistan does not retaliate then itâs just an event else a major sell-off will be seen.”
Indiaâs rupee fell 0.5 percent to 66.8025 per dollar as of 12:45 p.m. in Mumbai, halting a five-day gain. The benchmark S&P BSE Sens.e.x dropped 1.9 percent — the most in three months. Pakistanâs benchmark equity gauge pared gains to 0.5 percent from as much as 1.25 percent earlier Thursday.