Indian stock markets opened with strong gains on Monday, buoyed by improved investor sentiment following the de-escalation of tensions between India and Pakistan. The two nations reached an agreement over the weekend to cease hostilities, helping stabilize geopolitical concerns and boosting market confidence.
The benchmark Nifty 50 index opened at 24,420.10, marking a gain of 412.10 points or 1.72%. Similarly, the BSE Sensex surged nearly 1,300 points to open at 80,754.37, up 1.64%.
Market experts highlighted the resilience shown by Indian equities despite recent cross-border unrest. With a calming of tensions, investors returned to the markets with renewed enthusiasm, supported by strong domestic and foreign fund inflows.
Ajay Bagga, a banking and market expert, told ANI, "Indian futures are pointing to a sharp 2% up-move, as all the losses from the India-Pakistan kinetic conflict have been recouped following the cessation of active hostilities. The markets weathered the turbulence well and are poised for a strong recovery."
He also pointed out that the tourism sector in North India suffered significantly, with widespread cancellations during the peak summer travel season. On the other hand, defense stocks are likely to benefit from expected new orders. "Sentiment remains fragile geopolitically, but the resilience of the Indian markets suggests potential for a sustained rally, with both FPIs and DIIs maintaining a buying stance," Bagga added.
Broad-based buying was seen across sectors, except pharma. The Nifty PSU Bank index jumped over 3%, indicating renewed interest in public sector banks. Nifty Auto rose 2.25%, Nifty IT gained 2.16%, and Nifty Realty led the rally with an early surge of over 4%.
Global cues also contributed to the positive mood. The US and China reported "productive and positive" outcomes from their weekend trade talks in Geneva, further encouraging investors. Asian markets opened higher on optimism surrounding a possible US-China trade agreement.
Meanwhile, gold prices fell by more than 2%, while oil prices and the US dollar edged higher. US futures pointed to gains of over 1% for Wall Street later in the day.
However, pharma stocks may come under pressure as US President Donald Trump is expected to sign an executive order targeting a reduction in prescription drug prices. Trump is also set to begin a Middle East tour on Tuesday, with potential announcements expected in areas such as energy, nuclear agreements, defense procurement, and strategic partnerships.
