Will Ceasefire & FPI Inflows Lift Markets this Week?
The Indian stock market witnessed a rollercoaster ride last week, with the Sensex plummeting by 1,047 points, its biggest single-day fall since October 2018. The market was gripped by fear and uncertainty as the US-China trade tensions escalated, leading to a global sell-off. However, with the recent developments and data, markets may be poised to rebound this week, and investors are hoping that the ceasefire and foreign portfolio investment (FPI) inflows will lift the mood.
Ceasefire Brings Relief
The ceasefire announced by the US and China has brought much-needed relief to the markets. The agreement to suspend new tariffs and resume trade talks has eased the tension, and investors are now cautiously optimistic about the prospects of a deal. The ceasefire has also helped to stabilize the rupee, which has been under pressure due to the trade tensions. The currency has strengthened by 0.4% against the US dollar, and this could lead to a reduction in import costs and a boost to the economy.
Strong Q4 Results
The recent Q4 results announced by Indian companies have been strong, with many beating expectations. The results have shown that the economy is still growing, despite the challenges posed by the slowdown in the global economy. The strong results have also boosted investor confidence, and many analysts believe that the market will rebound this week on the back of this positive news.
Easing Tariffs
The easing of tariffs by the US and China has also had a positive impact on the markets. The reduction in tariffs will lead to a reduction in import costs, which will benefit Indian companies that import raw materials and finished goods from these countries. This will also lead to an increase in demand for Indian goods, which will boost the economy.
Travel and Tourism to Recover
The travel and tourism industry was one of the hardest hit by the recent developments. The industry had been growing rapidly, and the slowdown in global travel due to the trade tensions had a significant impact on the sector. However, with the ceasefire and the easing of tariffs, the industry is likely to recover in the coming weeks. The recovery is expected to be led by the domestic market, with Indians taking more vacations and traveling more frequently.
Currency and Reserves Data
The currency and reserves data released by the Reserve Bank of India (RBI) have also pointed to cautious optimism. The data showed that the country’s foreign exchange reserves had increased by $1.2 billion to $431.6 billion, despite the outflow of funds due to the market volatility. The data also showed that the rupee had strengthened by 0.4% against the US dollar, which is a positive sign.
FPI Inflows
The FPI inflows have also been a positive sign for the market. The inflows have been driven by the strong Q4 results and the ceasefire, and many analysts believe that the inflows will continue in the coming weeks. The FPI inflows will help to boost the market, and this could lead to a rebound in the Sensex and the Nifty.
Conclusion
In conclusion, the market may rebound this week on the back of the ceasefire, FPI inflows, and strong Q4 results. The easing of tariffs and the recovery of the travel and tourism industry are also expected to boost the market. While there are still challenges to be faced, the data and developments suggest that the market is poised for a rebound. As always, investors should exercise caution and do their own research before making any investment decisions.
Source:
https://www.thecore.in/podcasts/markets-set-to-edge-up-on-ceasefire-moves-835131
