Will Ceasefire & FPI Inflows Lift Markets this Week?
The Indian equity market has been on a wild ride lately, with last week’s 1,047-point fall in the Sensex being a stark reminder of the volatility that has characterized the market in recent times. However, as the dust settles, there are reasons to believe that the markets may rebound this week, driven by a combination of factors, including the ceasefire in Ukraine, Foreign Portfolio Investors (FPIs) returning to the market, and strong Q4 results from many companies.
In this blog post, we will take a closer look at these factors and explore whether they can help lift the markets this week.
Ceasefire in Ukraine: A Potential Game-Changer
The ceasefire in Ukraine, which came into effect on Friday, has been a significant development that has helped ease tensions in the global markets. The conflict has been a major source of uncertainty for investors, and the ceasefire has provided a much-needed relief.
While the ceasefire is not a guarantee of peace, it has certainly helped to reduce the fear of a full-blown war, which had been weighing heavily on the markets. As a result, investors are now looking to the ceasefire as a potential game-changer that could help lift the markets.
FPIs Return to the Market
Another factor that could help lift the markets this week is the return of FPIs to the Indian market. FPIs have been absent from the market in recent times, due to concerns over the Ukraine conflict and the value of the rupee.
However, with the ceasefire in place, FPIs are now looking to return to the market, and this could provide a much-needed boost to the Indian equity market. FPIs have been significant players in the Indian market, and their absence has been felt in recent times.
Strong Q4 Results
The Indian corporate sector has been delivering strong Q4 results, which has helped to boost investor sentiment. Many companies have reported impressive earnings growth, and this has helped to alleviate concerns over the state of the economy.
The strong Q4 results have been driven by a combination of factors, including the pick-up in demand, cost-cutting measures, and the benefits of the demonetization exercise. As a result, investors are now looking to the Q4 results as a potential catalyst for the markets.
Travel and Tourism: A Sector in Recovery
The travel and tourism sector has been one of the hardest hit by the Ukraine conflict, and the ceasefire could help to lift the sector. The sector has been struggling due to the fear of travel, and the conflict has led to a significant decline in tourist arrivals.
However, if the ceasefire holds, the sector could start to recover, and this could provide a much-needed boost to the economy. The sector is a significant contributor to the country’s GDP, and its recovery could have a positive impact on the overall economy.
Currency and Reserves Data: A Positive Sign
Finally, the currency and reserves data for the week ending March 19 have provided a positive sign for the Indian economy. The data showed that the country’s foreign exchange reserves had increased by $1.35 billion during the week, and the rupee had strengthened by 0.45% against the US dollar.
The increase in foreign exchange reserves and the strengthening of the rupee are significant developments that could help to boost investor confidence. The data also showed that the country’s current account deficit had narrowed to 2.4% of GDP, from 2.6% in the previous quarter.
Conclusion
In conclusion, while the Indian equity market has been volatile in recent times, there are reasons to believe that the markets may rebound this week. The ceasefire in Ukraine, FPIs returning to the market, strong Q4 results, and the recovery of the travel and tourism sector could all help to lift the markets.
Additionally, the currency and reserves data provide a positive sign for the Indian economy, and this could help to boost investor confidence. While there are still risks involved, the combination of these factors could provide a much-needed boost to the Indian equity market.
News Source:
https://www.thecore.in/podcasts/markets-set-to-edge-up-on-ceasefire-moves-835131
