Indian Stock Market Sees Significant Surge Amidst India-Pakistan Ceasefire and US-China Trade Deal Progress
The Indian equity benchmark indices, Nifty50 and BSE Sensex, experienced a substantial rally in trade on Monday, driven by the India-Pakistan ceasefire and progress in US-China trade discussions. According to reports from the Times of India, both indices surged over 3.5%, buoyed by domestic stability and favourable global news.
As of 3:21 PM, Nifty50 was trading at 24,932.70, up 925 points or 3.85%, while BSE Sensex was at 82,432.13, up 2,978 points or 3.75%. The market capitalisation of companies listed on the BSE increased substantially by Rs 13.1 lakh crore, reaching a total valuation of Rs 429.5 lakh crore, as per an ET report cited by the Times of India.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, told the Times of India that "the ceasefire between India and Pakistan has paved the way for a sharp rally in the market. The prime mover of the rally will be the FII buying which has been sustained for sixteen continuous days except last Friday when the conflict escalated." He added that domestic macros like expectations of high GDP growth and revival of earnings growth in FY26 and declining inflation and interest rates augur well for the resumption of a rally in the market.
Top Reasons Behind Monday’s Market Surge
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India-Pakistan Ceasefire Reduces Uncertainty: The Times of India reports that investors responded positively after India and Pakistan agreed to temporarily suspend military actions on Saturday, following a week of reciprocal attacks and drone operations. The ceasefire remained intact through Sunday, leading to renewed investor confidence as markets responded to signs of decreasing geopolitical stress.
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Global Risk Sentiment Improves Following US-China Trade Discussions: The Times of India cited that Asian equity markets advanced nearly 1% after the United States and China announced "substantial progress" in their trade discussions held in Geneva over the weekend. The positive development lifted US futures and petroleum prices, enhancing confidence in Indian financial markets.
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SIP Investments Reach New Heights: The Times of India reported that domestic institutional backing remained robust, with monthly SIP contributions achieving a new peak of Rs 26,632 crore in April, representing a 2.72% increase from the preceding month. SIP-managed assets totalled Rs 13.9 lakh crore, whilst FY25 SIP inflows increased by 45.24%, marking the strongest growth since FY18.
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Broad Market Rally Across Sectors: The Times of India noted that all key sector indices showed positive movement at opening, except for pharmaceutical and healthcare segments. Nifty Realty emerged as the top performer with a 4.5% increase, whilst Nifty PSU Bank rose by 3%, Nifty Auto by 2.5%, and Nifty IT by 3.7%.
- Petroleum Prices Advance on Trade Prospects: The Times of India stated that oil prices increased due to positive developments in US-China trade talks, indicating enhanced demand from the two largest petroleum consumers globally. Brent crude advanced 27 cents (0.4%) to $64.18 per barrel, whilst WTI increased 28 cents (0.5%) to $61.30.
Devarsh Vakil, Head of Prime Research at HDFC Securities, told the Times of India that "markets are set to soar as geopolitical tensions thaw." He added that "the trade deal announcement between the U.S. and the UK, along with reports that U.S. and Chinese officials met in Switzerland over the weekend, paved the way for broader negotiations and tariff de-escalation—supporting investor sentiment."
In conclusion, the Indian stock market experienced a significant surge on Monday, driven by the India-Pakistan ceasefire and progress in US-China trade discussions. As reported by the Times of India, the market capitalisation of companies listed on the BSE increased substantially, and all key sector indices showed positive movement. The rally is expected to continue, driven by domestic stability and favourable global news.
