Will Ceasefire & FPI Inflows Lift Markets This Week?
Last week was a tumultuous one for the Indian stock market, with the Sensex plummeting by a staggering 1,047 points. The markets were hit hard by the escalating tensions between India and Pakistan, with investors globally taking a cautious approach. However, as the situation appears to be calming down, there are signs that the markets may rebound this week.
One of the key factors that could lift the markets is the return of Foreign Portfolio Investors (FPIs). FPIs have been significant players in the Indian stock market, and their absence has been felt in recent weeks. However, with the ceasefire agreement in place, FPIs may be more likely to return to the market, injecting much-needed liquidity and driving prices higher.
The ceasefire agreement, which was announced on Wednesday, has eased tension between India and Pakistan, and markets are reacting positively to the development. The agreement has been hailed as a significant step towards reducing the risk of conflict, and investors are breathing a sigh of relief.
In addition to the ceasefire agreement, the recent Q4 results from Indian companies have also sparked optimism. Many companies have reported strong earnings, with revenues and profits beating expectations. This has helped to boost investor confidence and could drive the markets higher in the coming days.
Another positive sign is the easing of tariffs. The Indian government has decided to ease tariffs on certain imports from Pakistan, which could help to boost trade between the two countries. This could have a positive impact on the Indian economy, as well as the stock market.
Travel and tourism were among the sectors that were hit hardest by the tensions between India and Pakistan. However, with the ceasefire agreement in place, these sectors may be poised for a recovery. As investors begin to feel more confident, they may be more likely to invest in these sectors, which could drive prices higher.
Currency and reserves data also point to cautious optimism. The Indian rupee has strengthened against the US dollar in recent days, and foreign exchange reserves have risen. This suggests that investors are becoming more confident in the Indian economy and may be more likely to invest in the country.
In an interview with The Core, market analysts predicted that the markets could rebound this week. “The ceasefire agreement has taken a significant amount of uncertainty out of the market, and FPIs are likely to return,” said one analyst. “Combine this with strong Q4 results and easing tariffs, and the stage is set for a market rebound.”
Other analysts agree, predicting that the markets could rise by up to 2% this week. “The markets have been oversold, and the ceasefire agreement has given investors a reason to be optimistic,” said another analyst. “We could see a significant rebound in the coming days.”
Of course, there are still risks and challenges that the Indian stock market faces. The ongoing trade tensions between the US and China, as well as the uncertainty surrounding Brexit, could continue to impact the market. However, with the ceasefire agreement in place and FPIs likely to return, the stage is set for a market rebound.
In conclusion, despite last week’s 1,047-point fall in the Sensex, there are signs that the markets may rebound this week. The ceasefire agreement, strong Q4 results, and easing tariffs offer hope, while currency and reserves data point to cautious optimism. As investors begin to feel more confident, they may be more likely to invest in the Indian stock market, driving prices higher. With the stage set for a market rebound, investors may want to consider taking a more optimistic view of the market.
Source: https://www.thecore.in/podcasts/markets-set-to-edge-up-on-ceasefire-moves-835131
