India-Pak ceasefire: Stock market investors to take sigh of relief, positive action likely on Monday

Stock market investors are likely to take sigh of relief on Monday morning after India and Pakistan agreed on a cease-fire after four days of heavy missile and drone strikes. The benchmark stock indices Sensex had Nifty had settled lower in the past two sessions amid concerns the brewing hostility between the two countries would turn into a full-fledged war. 

“India-Pakistan de-escalation is definitely a positive news for stock investors, and one should expect a positive market move in the short run. The market dislikes uncertainty. The focus would now be back on the growth agenda,” said Kranthi Bathini, Equity Strategist at WealthMills Securities. 

Amar Ambani, head of Research at YES Securities said the news should cheer market on Monday. He felt the provisional release of a $1 billion IMF loan that Pakistan secured the previous day was probably linked to the ceasefire. He noted that Indian markets have seen both time and price-wise correction since September peak and the valuations thus look reasonable. 

NSE’s MD & CEO Ashish Chouhan said the stock exchange heartily welcomes the decision by India & Pakistan to cease hostilities immediately. 

“Kudos to the Indian Government’s efforts under the leadership of Prime Minister Shri Narendra Modi ji & his unwavering support to our brave Armed Forces for ensuring peace & stability for our country,” he said.

Earlier in the day, foreign Secretary Vikram Misri confirmed that the ceasefire was initiated by a call from the Pakistani Director General of Military Operations at 15:35 IST. The ceasefire has been brokered by a direct military call, not diplomacy, Indian officials clarified on Saturday.

Pakistani Foreign Minister Ishaq Dar confirmed the ceasefire on Islamabad’s end, saying Pakistan “has always strived for peace and security in the region, without compromising on its sovereignty and territorial integrity.”

US President in a social media India and China agreed on full and immediate ceasefire after a “long night of talks”. 

Market veteran Shankar Sharma in a sarcastic post of X said:  “I think Pakistan buckled under US threat to impose punitive 300% tariffs on Pak’s massive exports to the US.”

Ambani of YES Securities said most of the past conflicts with Pakistan, the three-month return post the development was positive, except for the Uri case, which in fact was a period of demonetisation. 

Ambani, meanwhile, sees upside capped for the next three-six months amid lack of cues for the market. He sees the market revisiting the September 2024 peak by end of this year or early next year. 

Bathini of WealthMills Securities said the focus should now shift to US-China trade talks and earnings.