logo
Will a fragile India-Pakistan ceasefire spark a stock market rally? 5 signs to read

Will a fragile India-Pakistan ceasefire spark a stock market rally? 5 signs to read

Economic Times11-05-2025

Despite heightened tensions at the borders, the announcement of an India-Pakistan ceasefire is expected to set Indian markets on an upward trajectory this week. The markets, which had been recovering from a recent correction, took a hit as tensions between the two countries escalated.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Despite heightened tensions at the borders, the announcement of an India-Pakistan ceasefire is expected to set Indian markets on an upward trajectory this week. The markets, which had been recovering from a recent correction, took a hit as tensions between the two countries escalated. Headline indices Sensex and Nifty fell over 1% on Friday. THowever, it should be noted that the Indian government has said Pakistan violated the ceasefire agreement along the Line of Control (LOC) and the situation remains evolving by the minute.During the conflict, the stocks showed resilience with no major correction, which indicates strong underlying confidence. The ceasefire news is likely to further bolster that and support a market rebound."With the announcement of a ceasefire, the lingering fear among investors is expected to ease further. As a result, we anticipate a positive start to the week," said Shruti Jain, Chief Strategy Officer, Arihant Capital Markets India and Pakistan agreed to a ceasefire on Saturday after experiencing their worst fighting in decades. For four days, the two nuclear-armed neighbors exchanged missile, drone, and artillery strikes. The ceasefire was first announced by US President Donald Trump, who claimed that the United States had acted as a mediator. However, India denied that the US played a role in brokering the agreement.The conflict began after terrorists killed 26 people in a tourist area on the Indian side of Kashmir last month. Following this, India on the night of May 7 launched precision strikes against terror infrastructure.Prashanth Tapse of Mehta Equities noted that the ceasefire between India and Pakistan marks a significant diplomatic and strategic victory for India in its fight against terrorism."This de-escalation removes a key overhang on investor sentiment and is likely to be seen as a major positive development by financial markets," he said.History too favours a rebound, where markets have shown a tendency to recover following such geopolitical de-escalations."A gap-up opening of 200–300 points on the benchmark indices is expected on Monday, as investor confidence returns. However, volatility is likely to persist, driven by the ongoing earnings season and global uncertainties—especially tariff-related developments," Tapse said.Technically, Nifty held above 24000 and now 23500 mark becomes a key make-or-break support, according to various analysts."On the upside, immediate resistance lies between 24250 and 24300. A broader recovery may only unfold once Nifty decisively surpasses the stiff hurdle at 24600, which marks the 61.8% retracement of the fall from all-time highs," said Rajesh Bhosale, Equity Technical Analyst, Angel One.Here are 5 signs to read about the impact of India-Pakistan ceasefire on marketsCeasefire announced after Intense fighting: India and Pakistan agreed to a ceasefire on Saturday following four days of intense conflict.Markets likely to rebound: Despite recent market volatility, the announcement of a ceasefire is expected to support a market rebound this week.Stocks showed resilience during conflict: Indian stocks showed resilience even during the border tensions, experiencing no major correction.Sentiment booster: Analysts like Prashanth Tapse of Mehta Equities believe the ceasefire marks a strategic victory for India and removes a key overhang on investor sentiment. The de-escalation is seen as a positive development for financial markets.Technical levels to watch: Nifty is expected to find strong support at 23,500, while resistance lies between 24,250 and 24,300.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

'Willing to enhance dialogue': China on lifting export curbs on rare earth metals to India
'Willing to enhance dialogue': China on lifting export curbs on rare earth metals to India

First Post

timean hour ago

  • First Post

'Willing to enhance dialogue': China on lifting export curbs on rare earth metals to India

China on Thursday signaled openness to talks with India over its export restrictions on rare earth materials, saying it is willing to strengthen dialogue and cooperation with relevant countries to help maintain stable industrial supply chains read more China on Thursday signaled openness to talks with India over its export restrictions on rare earth materials, saying it is willing to strengthen dialogue and cooperation with relevant countries to help maintain stable industrial supply chains. Beijing's recent curbs on the export of critical metals have disrupted manufacturing sectors globally, including in India, impacting industries such as automotive and semiconductor production. 'We are willing to enhance dialogue and cooperation with relevant countries and regions to jointly keep the stability of global industrial and supply chains,' Chinese Foreign Ministry spokesperson Lin Jian told PTI when asked whether China plans to lift its export restrictions on rare earth metals to India, especially as it has started approving export licences to the US and the EU. While offering no direct assurance, Lin reiterated that specific details should be addressed by the relevant Chinese authorities. STORY CONTINUES BELOW THIS AD Meanwhile, India's Ministry of External Affairs (MEA) said it is in contact with Chinese counterparts to ensure greater predictability in the supply chain, in line with international trade norms. 'We have been in touch with the Chinese side, the Chinese Ministry of Commerce and general administration of customs in early April, as you would be aware, had announced the decision to implement export controls on certain rare earth-related items. 'We are in touch with the Chinese side, both here in Delhi as also in Beijing, to bring predictability in supply chain for trade, consistent with international practices,' MEA spokesperson Randhir Jaiswal told reporters in response to a query on Thursday. On June 16, Indian Ambassador Pradeep Kumar Rawat met with Chinese Vice Minister Sun Weidong to discuss a range of bilateral issues, including shared concerns, PTI quoted a statement from China's foreign ministry. The meeting comes amid growing alarm in India over shortages of rare earth metals, crucial for the automotive, electronics, and renewable energy sectors. Reports from India have highlighted industry-wide disruptions stemming from China's recent export restrictions on these critical materials. China, which holds a dominant position in the global rare earths market, has recently begun selectively clearing export licences, particularly to the United States, following two days of high-level trade talks in London. The move came as both nations agreed to ease tensions, with US President Donald Trump declaring on Wednesday that a trade deal with China 'is done.' STORY CONTINUES BELOW THIS AD Rare earth elements, comprising 17 metallic elements, are vital for the production of magnets, batteries, and high-tech devices. While these metals are found in multiple countries, their extraction is expensive and environmentally hazardous, often leaving China as the preferred global supplier. According to the International Energy Agency, China accounts for 61% of global rare earth mining and 92% of processing output. Although China has opened dialogue with the US and EU to address concerns over supply shortages, it has yet to publicly respond to India's request for similar talks. In response, India's Ministry of External Affairs said it is engaging with the Chinese side to ensure stability and predictability in trade supply chains. Meanwhile, an Indian industry delegation, comprising representatives from the auto sector, is reportedly preparing to visit China to secure rare earth magnet imports for domestic manufacturers, sources in New Delhi said. With inputs from agencies

Putin, Trump, Macron, Starmer, Carney, react to Air India plane crash
Putin, Trump, Macron, Starmer, Carney, react to Air India plane crash

Hindustan Times

timean hour ago

  • Hindustan Times

Putin, Trump, Macron, Starmer, Carney, react to Air India plane crash

World leaders expressed shock and deep sorrow after an Air India Boeing 787 with 242 people on board crashed near Ahmedabad on June 12. The flight, bound for London Gatwick, included nationals from India, the UK, Portugal, and Canada. Indian Prime Minister Narendra Modi, UK Prime Minister Keir Starmer, Ukrainian President Volodymyr Zelensky, French President Emmanuel Macron, Russian Ambassador Denis Alipov, European Commission President Ursula von der Leyen, and Israeli Foreign Minister Gideon Sa'ar all issued heartfelt statements, calling the tragedy 'devastating' and 'heartbreaking.'

Tagore's Ancestral House vandalised in Bangladesh: Despicable, says India; Mamata asks PM to ‘build global pressure on Dhaka' to act
Tagore's Ancestral House vandalised in Bangladesh: Despicable, says India; Mamata asks PM to ‘build global pressure on Dhaka' to act

Indian Express

timean hour ago

  • Indian Express

Tagore's Ancestral House vandalised in Bangladesh: Despicable, says India; Mamata asks PM to ‘build global pressure on Dhaka' to act

India on Thursday condemned the ransacking of the ancestral home of Nobel laureate Rabindranath Tagore in Bangladesh by a mob, terming the violent attack a 'disgrace' to the memory and inclusive philosophy espoused by the poet. West Bengal Chief Minister Mamata Banerjee, in a letter to Prime Minister Narendra Modi, sought his intervention for 'a strong international protest', which she said, 'would at least deter in future any attack on monuments of cultural legacies'. On Tuesday, a mob vandalised the ancestral home of Tagore at Kachharibari in Sirajganj district of Bangladesh. Rabindra Kachharibari, also known as the Rabindra Memorial Museum, was the revenue office of the Tagore family where he wrote several literary works. Tagore's grandfather, Dwarkanath Tagore, had built the two-storey mansion in 1840. In Delhi, MEA spokesperson Randhir Jaiswal urged the interim government in Bangladesh to rein in these elements and take 'strict action' against the perpetrators to prevent recurrence of such incidents. 'We strongly condemn the despicable act, attack and vandalisation of the ancestral home of Gurudev Rabindranath Tagore by a mob,' the MEA spokesperson said, adding the attack falls in the 'broad pattern of systematic attempts by extremists to erase the symbols of tolerance and eviscerate the syncretic cultural legacy of Bangladesh'. The Bangladesh authorities have constituted a three-member committee to investigate the incident, according to media reports in Bangladesh. In the letter to the Prime Minister, Banerjee urged him to 'take up the matter very strongly' with the Bangladesh government. 'Although untold damage has already been done, a strong international protest would at least deter any attack on monuments of cultural legacies in the future… What has been vandalised is not a mere house, but a towering fountain of creativity in our subcontinent,' she wrote. 'The incident of vandalism is not only shocking, but also unfortunate for our national pride and cultural legacy. It is a vile attack on our sensibilities, our cherished treasures, and our common nostalgia for a past when Tagore could transcend all thresholds in pursuit of his immortal creations,' she wrote. CPI(M) general secretary MA Baby called the ransacking of Tagore's ancestral home 'highly deplorable'. 'Great cultural icons shouldn't be targeted for petty interests. Tagore wrote the national anthems for both India and Bangladesh. The Bangladesh govt should act against the vandals,' Baby said. The BJP also condemned the attack, calling it 'an assault on the very soul of India's rich cultural and civilizational heritage'. BJP spokesperson Sambit Patra called for global denunciation of the incident targeting the legacy of the iconic Indian personality, as he described it as a 'preplanned' attack orchestrated by Islamic groups. He also targeted the West Bengal chief minister, accusing her of 'not raising the issue'. She sees infiltrators from neighbouring Bangladesh as a vote bank and has opted to keep quiet for political reasons,' he alleged. BJP leaders in poll-bound West Bengal called it 'a wake-up call for the Hindus' in the state. Leader of Opposition and BJP MLA Suvendu Adhikari, who posted a purported video of the attack, said: 'When extremist forces gain ground, they spare no one; not even a figure revered worldwide like Tagore…. This serves as a reminder of the need for vigilance in protecting our cultural heritage, especially in demographically volatile regions. When the demography changes, and a number of such elements increase, they will not hesitate to target our temples, our culture, and our way of life, as it can already be witnessed in Malda, Murshidabad, and Maheshtala.' With PTI

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store