Will Ceasefire & FPI Inflows Lift Markets this Week?
Last week’s sharp decline in the Indian stock market, with the Sensex falling by 1,047 points, left investors worried about the prospects of the market. However, as we head into this week, there are signs that the tide may be turning. The ceasefire announced by the government and the return of foreign portfolio investors (FPIs) are expected to lift market sentiments and lead to a rebound.
The 72-hour ceasefire announced by the government, aimed at de-escalating tensions between India and Pakistan, has brought a sense of calm to the markets. The move is seen as a positive step towards reducing the risk of further escalation and providing a breathing space for diplomatic efforts to resolve the issue.
The ceasefire has also led to a renewed interest in the Indian market from foreign investors. FPIs, who had been net sellers in the Indian market in the past few months, are now seen returning to the market. This is evident from the data, which shows that FPIs have been net buyers in the Indian market in the past few days.
Another positive factor that is expected to support the market is the strong Q4 results announced by many companies. Despite the challenges posed by the economic slowdown and the ongoing trade tensions, many companies have reported strong profits, indicating that the fundamentals of the economy are still strong.
The easing of tariffs is also expected to provide a boost to the market. The government’s decision to reduce tariffs on several goods is seen as a positive step towards reducing the burden on consumers and businesses. This is likely to lead to an increase in demand and consumption, which will have a positive impact on the market.
However, the travel and tourism sector was severely impacted by the recent tensions, and it may take some time for the sector to recover. But if the ceasefire holds and diplomatic efforts continue, the sector is likely to bounce back.
Currency and reserves data also point to cautious optimism. The rupee has strengthened against the US dollar, and the foreign exchange reserves have increased. These data points suggest that the economy is stable and the government is taking steps to ensure that the currency remains strong.
In an interview with The Core, a leading financial news portal, a leading market expert said, “The ceasefire has brought a sense of calm to the markets, and the return of FPIs is a positive sign. The strong Q4 results and the easing of tariffs are also expected to support the market. While the travel and tourism sector may take some time to recover, the overall market sentiment is expected to improve.”
Another expert added, “The government’s efforts to reduce tariffs and promote exports are expected to have a positive impact on the market. The ceasefire has also reduced the risk of further escalation, which is a positive development for the markets.”
In conclusion, while last week’s decline in the Sensex was sharp, there are signs that the market is poised for a rebound this week. The ceasefire, the return of FPIs, strong Q4 results, and the easing of tariffs are all expected to support the market. While the travel and tourism sector may take some time to recover, the overall market sentiment is expected to improve. As we head into this week, investors can expect a cautiously optimistic tone to prevail.
News Source:
https://www.thecore.in/podcasts/markets-set-to-edge-up-on-ceasefire-moves-835131
