Indo-Pak Ceasefire Boosts Investor Sentiment: Dalal Street eyes green start on Monday

Stock market investors can breathe a sigh of relief as India and Pakistan announced a ceasefire after four days of intense missile and drone attacks. The benchmark indices, Sensex and Nifty, had been under pressure in the last two sessions over fears of escalating conflict.

With tensions easing, market experts expect a positive start to trading on Monday.

“The de-escalation is good news for investors. Markets hate uncertainty, and now the focus can return to growth,” said Kranthi Bathini, Equity Strategist at WealthMills Securities.

Amar Ambani, Head of Research at YES Securities, said the ceasefire announcement should boost investor sentiment. He also noted that Pakistan’s recent $1 billion loan approval from the IMF may have been tied to the truce.

“Indian markets have already corrected since their September peaks, both in time and price. Valuations are now looking reasonable,” Ambani added.

NSE MD & CEO Ashish Chouhan also welcomed the ceasefire. “Kudos to Prime Minister Narendra Modi and our Armed Forces for ensuring peace and stability for India,” he said.

How the Ceasefire Happened

India’s Foreign Secretary Vikram Misri confirmed the ceasefire was arranged through a direct military call initiated by Pakistan’s Director General of Military Operations at 3:35 PM IST. Indian officials clarified that the deal was made via military communication, not diplomatic channels.

Pakistan’s Foreign Minister Ishaq Dar also confirmed the ceasefire, stating that Pakistan is committed to peace in the region while maintaining its sovereignty.

Interestingly, US President also shared on social media that India and China had agreed to a full ceasefire after “a long night of talks.”

Meanwhile, market veteran Shankar Sharma took a dig at Pakistan in a post on X: “Looks like Pakistan gave in after the US threatened to impose 300% tariffs on its ‘massive’ exports to America.”

What’s Next for the Market?

Looking ahead, Ambani believes the ceasefire will bring short-term gains but says upside potential is limited for the next 3-6 months without fresh triggers. He expects the market to retest its September 2024 highs by year-end or early next year.

Bathini added that the market’s attention will now shift towards US-China trade negotiations and corporate earnings season.

Disclaimer: This article is for informational purposes only and not investment advice. Please consult a financial advisor before making investment decisions.