Will Ceasefire and FPI Inflows Lift Markets this Week?
The Indian equity market may be on the cusp of a rebound this week, with a ceasefire between India and Pakistan and foreign portfolio investor (FPI) inflows offering a glimmer of hope. Despite a brutal 1,047-point fall in the Sensex last week, strong Q4 results from several companies and easing of tariffs provide a foundation for a market recovery. The travel and tourism sectors, which were hit hard by the recent tensions, may also begin to show signs of recovery if the calm holds.
In a podcast interview with The Core, a leading financial news publication, experts shared their views on the current market scenario and the factors that could influence the trend this week.
“Markets were already facing headwinds due to global cues, and the recent tensions between India and Pakistan only added to the volatility,” said a market expert. “However, the ceasefire has brought some relief, and FPIs are likely to return to the market, which could lead to a rebound.”
FPIs have been net sellers in the Indian market for several weeks, but the recent developments could change their stance. Inflows from FPIs can be a significant boost to the market, as they bring in fresh capital and increase liquidity.
Another factor that could support the market is the strong Q4 results from several companies. Many companies have reported robust earnings, beating street expectations, which has boosted investor confidence. The results have also shown that the Indian economy is resilient and can withstand external shocks.
Tariffs have also been a major concern for the Indian market, particularly in the wake of the US-China trade war. However, the easing of tariffs has provided some relief, and investors are looking forward to a more stable trade environment.
The travel and tourism sectors, which were severely impacted by the recent tensions, may also begin to recover if the calm holds. The sectors have been hit hard by the cancellations and postponements of travel plans, but if the situation normalizes, there could be a recovery in bookings and tourism activity.
Currency and reserves data also point to cautious optimism. The Indian rupee has stabilized against the US dollar, and foreign exchange reserves have increased. This suggests that the economy is in a good position to withstand external shocks and maintain its stability.
While there are several positive factors that could support the market this week, it’s essential to remain cautious. The Indian equity market is known for its volatility, and there could be ups and downs in the coming weeks. Investors should focus on quality stocks and have a long-term perspective to navigate the market.
In conclusion, while the recent tensions between India and Pakistan have been a significant concern, the ceasefire and FPI inflows offer hope for a market rebound this week. Strong Q4 results, easing of tariffs, and a recovery in the travel and tourism sectors could all contribute to a positive trend. However, investors should remain cautious and focus on quality stocks to navigate the market.
Source:
https://www.thecore.in/podcasts/markets-set-to-edge-up-on-ceasefire-moves-835131
