Benchmark stock indices Sensex and Nifty are likely to see a strong start to Monday’s trade, as suggested by 460-odd points or nearly 2 per cent surge in Gift Nifty earlier today, amid cautious optimism over ease in India-Pakistan tensions. The gains would be supported by ‘productive’ US-China trade talks in Geneva over the weekend, whose details are due today.
In the case of India and Pakistan, Sunday was the first calm night void of any ceasefire violations in last 19 days post Pahalgam attack. Both the countries had earlier agreed to halt hostilities, but it took only a couple of hours for Pakistan to violate the arrangements on Saturday. There will be a response and it will be a punitive one, India warned Pakistan, following which a tense quietness prevailed on Sunday.
Amar Ambani, Head of Research at YES Securities said the news should aid market on Monday. He felt the provisional release of a $1 billion IMF loan that Pakistan secured 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. Markets across mainland China, Hong Kong, Japan and Korea gained up to 1.2 per cent. Gift Nifty was up 460 points or 1.91 per cent at 24,542.
In the case of US-China trade talks, Secretary of the Treasury Scott Bessent said: “We will be giving details tomorrow, but I can tell you that the talks were productive. We had the vice premier, two vice ministers, who were integrally involved, Ambassador Jamieson, and myself. And I spoke to President Trump, as did Ambassador Jamieson, last night, and he is fully informed of what is going on. So, there will be a complete briefing tomorrow morning.”
“That being said, there was a lot of groundwork that went into these two days. Just remember why we’re here in the first place — the United States has a massive $1.2 trillion trade deficit, so the President declared a national emergency and imposed tariffs, and we’re confident that the deal we struck with our Chinese partners will help us to work toward resolving that national emergency,” Jamieson Greer, US Trade Representative Ambassador said.
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.
The Directors General of Military Operations (DGMOs) of both India and Pakistan are set to engage in crucial discussions today to solidify a ceasefire understanding reached recently. Both nations are expected to reinforce the ceasefire terms during the DGMO-level talks scheduled for today at 12 noon.
Kranthi Bathini, Equity Strategist at WealthMills Securities said he would closely watch any India-Pakistan escalations in the near future. For now, he said the focus should shift to US-China trade talks and earnings.
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