After the Pahalgam attack, the fight didn’t stay on the ground — it moved online. India and Pakistan faced a wave of cyberattacks, cyberwar, fake news on social media, and digital threats. The impact of cyberattacks was immediately felt as government websites were hit, rumors exploded on social media, and panic spread fast.
But while fear took over the internet, the stock market told a different story. Defense stocks and cybersecurity stocks went up. Investors started looking at where to put their money safely, especially in industries linked to cyberwarfare and national security.
In this article, we break down what really happened in cyberspace, how it affected markets, which stocks gained or fell, and what steps you can take to stay safe online. Whether you’re an investor or just someone scrolling through the news, this is what you need to know.
Cyberwarfare Escalation After the Pahalgam Attack
After the Pahalgam attack happened on 22 April 2025, cyberspace became a major battlefield between India and Pakistan. Cybersecurity firms noticed a massive increase in cyberattacks linked to both countries. For example, NSFOCUS reported a 500% surge in attacks on Indian targets and a 700% increase on Pakistani targets in late April.
Hacktivist groups (pro-India and pro-Pakistan) launched cyberwarfare against each other. These attacks included:
- DDoS attacks (where websites are flooded with fake traffic to make them crash)
- Website defacements (changing a website’s appearance or content)
- Malware campaigns (spreading harmful software)
- Phishing (tricking people into revealing personal information)
After the Pahalgam attack, cyberwar attacks focused mainly on Indian government websites, military systems, and critical infrastructure. The attackers used DDoS (Distributed Denial of Service) to flood websites with fake traffic, causing disruptions. They aimed to create confusion by targeting government agencies and defense organizations, increasing investor interest in defense stocks and cybersecurity stocks during this period.
Social media platforms like Twitter saw an increase in activity, with pro-Indian and pro-Pakistani groups spreading both real and fake news on social media. Hacktivist groups such as APT36 and Pakistan Cyber Force also attacked websites, spread malware, and used phishing tactics, affecting emails and social media accounts.
Fake news on social media spread regarding ATM shutdowns, power grid failures, and military attacks, and spread quickly, causing panic. Although most of these claims were proven false, they still created a lot of fear. Overall, the cyberattacks focused on government sites and fueled misinformation, making the situation worse.
Critical Infrastructure Under Siege: The Growing Impact of Cyberattacks
The cyberattacks impacted key sectors, causing temporary disruptions and fueling widespread misinformation— a reflection of the growing threat of cyberwar and cyberwarfare.
Government and Education
The cyberattackers targeted government portals, including defense and judicial websites, and educational institutions. The attackers were mostly DDoS and website defacement. Although the disruptions weren’t massive, there were instances where sensitive data from these websites might have been leaked or exposed. The Estimated loss for government services is ₹3,400 crore, and the educational sector faces over 8.000 cyberattacks per week.
Aviation Sector Impact
While the aviation sector faced cyberwar threats, including DDoS attacks that disrupted online booking and service portals, no major data breaches or financial losses were reported. Some airlines and airports experienced temporary service delays, and data security concerns were raised. 32 airports were shut down from 9 May 2025 to 15 May 2025 as a precautionary response to rising geopolitical tensions. Overall, the sector managed to avoid a severe impact due to prompt mitigation efforts and strong continuity planning.
Telecom
Communication networks like India Post and RailTel were targeted. No major outages occurred, and most attacks were brief and ineffective.
Financial Services
India’s financial services sector is expected to suffer losses of around ₹8,200 crore due to cybercrimes in 2025, making it the hardest-hit industry by such attacks.
Banks like Punjab National Bank and Indian Overseas Bank were mentioned in hacktivist claims. Amid the cyberattacks and threats, fake news on social media started circulating, particularly on social media, suggesting that ATM networks were going to be shut down or that there had been breaches in the banking system (meaning hackers had stolen sensitive financial information or disrupted banking services). However, these rumors were proven false. No large-scale breaches or financial losses occurred.
Defense and Railways
Defense was targeted by espionage campaigns, but no successful breaches occurred. Railways faced attempts at disruption with no significant impact.
Disinformation Campaigns
Fake news on social media flooded, with claims about ATM shutdowns and power grid failures. These rumors sparked widespread panic and confusion among the public. Although no such events occurred, the spread of misinformation amplified fear, creating unnecessary anxiety until the claims were debunked.
Financial Market Reactions and Sector Resilience Amid Cyberattack Threats
After the Pahalgam attack on April 22, 2025, Indian stock markets saw a quick dip. The Sensex and Nifty 50 fell sharply by April 30, and market fear was visible as the volatility index rose. The rupee also dropped by 1% on May 8, its biggest single-day fall in two years, due to fears of military escalation and cyberwar threats.
Market Recovery:
Despite early losses, Indian markets bounced back. By May 8, the Sensex and Nifty had recovered and were even slightly higher than before the attack. This showed investor confidence and market resilience, especially in sectors related to cyberwarfare.
Sector Highlights:
- Defense stocks like HAL, Mazagon Dock, and BEL went up as people expected more spending on national security.
- Cybersecurity stocks and IT companies like Quick Heal and R.S. Software also gained due to rising digital threats and the increased possibility of cyberwarfare between nations.
Foreign Investor Trends:
- In India, foreign investors mostly stayed calm, trusting the country’s strong economy.
- In Pakistan, the stock market dropped by over 4% as investors reacted to growing tensions and economic uncertainty.
Indian markets stayed strong despite the crisis. Defense and cybersecurity sectors performed well, and foreign investors remained confident. Meanwhile, Pakistan’s markets were more affected by the situation. Concerns about fake news on social media also played a role in short-term volatility.
Index/Stock | 22 April 2025 | 30 April 2025 | 7 May 2025 | Net Change (%) |
BSE Sensex | 80,116 | 79,212.53 | 80,334.81 | +0.27% |
Nifty 50 | 24,246.70 | 24,039.35 | 24,273.80 | +0.11% |
KSE-100 (Pakistan) | 113,000 | 109,500 | 107,845 | -4.55% |
HAL | ~3,300 | – | ~3,430 | +4% (approx) |
Mazagon Dock | ~2,400 | – | ~2,500 | +4% (approx) |
Quick Heal Tech. | ~280 | – | 284.30 | +1.5% |
Sasken Tech. | ~1,500 | – | 1,486.75 | -0.2% |
Key Stocks to Watch Amid Rising Cyberwarfare
After the Pahalgam attack and Operation Sindoor, investors turned to defense stocks and cybersecurity stocks for safety. These sectors saw a quick boost as the government prioritized national security and cyber readiness.
Company | 3-Year Returns | Sector Focus |
Mazagon Dock Shipbuilders | 1,973% | Shipbuilding |
Cochin Shipyard | 826% | Shipbuilding |
Hindustan Aeronautics (HAL) | 475% | Aerospace |
Bharat Dynamics (BDL) | 365% | Missiles |
Bharat Electronics (BEL) | 320% | Defense Electronics |
Data Patterns | 221% | Avionics & Electronics |
Paras Defence | – | Defense Tech |
Cybersecurity Precautions for Institutions and Individuals
- Avoid Phishing: Don’t click on suspicious links or attachments. Verify the sender’s identity and use updated security software, an essential step in defending against cyberwarfare tactics.
- Verify News: Rely on official government sources for updates and avoid spreading fake news on social media, which can escalate panic during national crises.
- Safe Browsing: Use strong passwords, enable two-factor authentication, and avoid public Wi-Fi for sensitive accounts — a key part of protecting against rising threats in the era of cyberwar.
- Digital Hygiene: Be cautious of fake news, educate others on cyber threats, and report suspicious activity.
Importance During National Crises:
Digital vigilance is crucial for national security. Practicing good cyber hygiene prevents misinformation and protects both personal and public interests. Institutions and individuals must collaborate to maintain trust and resilience during crises. Investors have also started to recognize the value of cybersecurity stocks and defense stocks, as these sectors become increasingly important in safeguarding the nation’s digital frontlines.
Conclusion
While cyberattacks and disinformation stirred public anxiety after the Pahalgam attack, the specter of cyberwar and rapidly evolving cyberwarfare tactics cast a long shadow online, yet the financial markets remained largely resilient. Defense stocks and cybersecurity stocks saw notable gains, reflecting investor confidence in national preparedness. Despite online disruptions and fake news on social media, no major infrastructure or financial collapse occurred — a testament to India’s quick response and digital resilience. The episode highlights a growing truth: in modern conflict, cyberspace and stock exchanges can both become battlegrounds — and opportunities. Staying informed, cautious, and cyber‑aware is not just wise, it’s essential.
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