While it may be premature to conclude that the ongoing protests by the Cockroach Janata Party (CJP) and activist Sonam Wangchuk’s hunger strike will affect market sentiment, investors are keeping a close watch as any escalation could have broader political implications.
The question of whether these developments could spook Dalal Street is still a distant one, but it does exist.
Protests and strikes- hallmarks of a vibrant democracy- rarely unsettle markets unless they materially increase the risk of political instability. At present, neither the CJP protests nor Sonam Wangchuk’s hunger strike appears to pose such a risk.
Chaos in the capital
On Monday, the “Sansad Chalo” march of the CJP turned into violent confrontations with the police. As per reports, CJP leaders Abhijeet Dipke, Saurav Das, Ashutosh Ranka and Gitanjali Angmo said the protest would continue until the government addressed the group’s demands, which include fixing accountability over alleged examination irregularities, the resignation of Union education minister Dharmendra Pradhan, and justice for students affected by the NEET paper leak.
Besides, activist Sonam Wangchuk, who has been on an indefinite fast since 28 June, reiterated that his indefinite hunger strike would continue unless the government accepted responsibility for failures in the education system or Parliament assured action on the issue.
As per a PTI report, the Delhi High Court on Tuesday proposed shifting Wangchuk from Safdarjung Hospital, Delhi, to Medanta Hospital, Gurugram.
Dalal Street watches from the sidelines
Dalal Street is driven as much by sentiment and narratives as by fundamentals. At a time when the conflict in the Middle East has emerged as a key concern for markets, such developments at home could serve as an additional irritant for investors.
While the agitations in Delhi have no direct impact on the stock market, some market participants fear they could make foreign portfolio investors (FPIs) more cautious.
Their concerns stem from recent political upheavals in neighbouring countries such as Bangladesh, Sri Lanka and Nepal, where prolonged protests reshaped the political landscape. However, drawing a parallel with India appears overstated, given the country’s relatively stable macroeconomic environment and the absence of any widespread social unrest.
However, the stock market appears largely unfazed by the ongoing protests, with experts saying they are unlikely to trigger any significant policy shifts or macroeconomic repercussions.
“Markets will not be affected by agitation. Our economy doesn’t face any risk of an aggregate supply crisis or a high-inflation regime. Therefore, nationwide large-scale escalation to the extent of impacting economic growth is most unlikely,” noted G Chokkalingam, the founder and head of research at Equinomics Research.
As per Chokkalingam, the only concern for the market is crude oil prices.
“If the Middle East conflicts continue for another one or two months and oil price also zooms to over $100 a barrel, then the economy and markets could be impacted adversely,” said Chokkalingam.
However, Chokkalingam added that the state of the Iranian economy is unlikely to allow a long-lasting war. If war persists US economy will also see again reversal of inflation rate and slowdown of GDP growth rate.
Harshal Dasani, Business Head at INVAsset PMS, underscored that one should separate what makes headlines from what makes it into an FPI allocation model.
Dasani explained that foreign investors price four things: currency stability, policy continuity on taxation and repatriation, the fiscal path, and the earnings trajectory. Street agitations enter that model only when they transmit into one of those four channels, and until they do, they remain a monitorable rather than a trigger.
According to Dasani, the Sri Lanka and Bangladesh parallels are structurally weak for one specific reason: in both cases, the causality ran from economic crisis to agitation to regime change, with collapsing reserves and balance-of-payments stress preceding the street.
India’s setup today is the inverse, with reserves near record levels, a contained current account, and growth, with its calendar year 2026 forecast raised to 6.8%.
“The precondition of a fragile economy that turned agitations in Sri Lanka and Bangladesh into market events is absent in India. India’s own history supports the same reading. Through both the JP movement and the Anna Hazare phase, the market’s real driver was the macro backdrop, the 1970s oil shock in one case and the global crisis plus the domestic policy-paralysis discount in the other. FPIs reacted to stalled reform and retrospective taxation in 2011-13, not to the crowds themselves,” Dasani noted.
“The underlying signal FPIs will quietly track is youth employment, because that is what the protests are symptomatically about, and it feeds directly into the urban consumption trajectory. The counterweight remains the structurally deepened domestic bid, which has absorbed ₹2.58 lakh crore of FPI selling this year already. The base case is watchfulness, not withdrawal, with the Fed path, crude, and tariffs remaining far larger FPI variables than domestic street noise,” said Dasani.
Nitant Darekar, a research analyst at Bonanza, has a similar view.
“The Jantar Mantar agitation and Sonam Wangchuk’s hunger strike are issue-specific accountability protests, not the systemic macro collapse that preceded regime changes in Sri Lanka and Bangladesh,” noted Darekar.
“India holds forex reserves of $675.16 billion, a stable rupee and a de-escalated Middle East. FPIs turned net buyers of ₹15,157 crore in July even as protests intensified. Our base case is a negotiated resolution; only a drift into policy paralysis, not street agitation, would trigger a re-rating of India risk,” Darekar said.
Read all market-related news here
Read more stories by Nishant Kumar
Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
