New Delhi, March 12 -- War is the last thing stock markets want. Yet history shows that equity investors cannot escape its consequences, or its opportunities.

Whenever conflict erupts, markets recoil first. Fear spreads quickly as investors try to assess the economic damage, disruptions to trade and the ripple effects on growth and inflation. Uncertainty becomes the dominant force, pushing valuations lower and volatility higher.

But markets have a long memory, and so do investors.

I was new to the markets when Iraq invaded Kuwait in 1990. Stock prices fell sharply, but what looked like chaos at the time felt like walking into a candy store. Companies I had always wanted to own suddenly traded at irresistible valuations. Investments mad...