Mumbai, May 8 -- The equity markets shrugged off early nerves on Wednesday following India's attack on Pakistani terror camps to end the day's trading session with quiet gains. Despite pre-open indications of a sharp 1% gap-down, the benchmark indices opened only slightly lower and swiftly clawed back losses. The Nifty 50 eked out a 0.1% gain, closing at 24,414.40 points, while the Sensex edged up 0.1% to settle at 80,746.78, reflecting the market's underlying resilience amid geopolitical headwinds. But India VIX, often called the market's fear gauge, spiked 4% intraday before settling just 0.3% higher-signalling elevated volatility despite the lukewarm market reaction to escalating India-Pakistan conflict. "We will have volatility and downside from time to time as global economic developments play out," Aashish Somaiyaa, chief executive of WhiteOak Capital AMC, said. Considering the Nifty 50's 10% gain in the past month amid global trade uncertainty, Somaiyaa said the market may have priced in too much optimism already. The optimism may also stem from a stabilizing rupee, easing bond yields, and a handful of strong earnings from large-cap companies, he added. The broader market stole the spotlight on Wednesday, with the Nifty Midcap 100 surging 1.6% and Nifty Smallcap 250 gaining 1.2%, comfortably outperforming the headline indices. On the other hand, Pakistan's benchmark KSE-100 index nosedived 6% intraday on Wednesday before clawing back some of the losses to close 3% lower. India launched 'Operation Sindoor' on early Wednesday targeting Pakistani terror sites, including ones linked to the attack on tourists in Kashmir's Pahalgam area two weeks ago that killed 26 people. "The key question is whether this turns into a full-fledged conflict or remains a limited defence strike," said Kranthi Bathini, director of equity strategy at WealthMills Securities, adding that a wider escalation could dent investor sentiment while a contained response may barely leave a mark on the markets. "Geopolitical risk that hung over the Indian markets has crystallised today with Indian strikes on POK and Pakistan-based terror camps," market expert Ajay Bagga said. The impact of such events on the markets tends to be sharp but short-lived. "The future impact on the market will depend on whether this strike remains contained to today or if it expands." Kotak Mutual Fund said the government's action suggested there was low possibility of a war breaking out. But while the market's direction is hard to predict, past India-Pakistan conflicts have caused only temporary dips, with history showing that the geopolitical shocks rarely derail India's long-term growth, Kotak Mutual fund added. Although the market is bracing for the fallout of escalating tensions between India and Pakistan, data from past two decades show India's equity markets rebound swiftly, often showing little lasting impact from such events in the long run. India has seen four major wars since 1950. During the Kargil war in 1999, the previous major conflict between the two nuclear-armed neighbours, India's equity markets remained robust after an initial panic, Kotak Mutual Fund said. On 26 February 2019, when the Indian Air Force struck terror camps in Balakot, the Sensex fell 239 points and the Nifty 50 shed 44 points. But the markets bounced back the very next day, with the Sensex opening 165 points higher and closing flat....