Indian stocks experienced a significant surge on Monday following the announcement of a ceasefire agreement between India and Pakistan. This development alleviated fears that rising military tensions could disrupt economic growth and lead to a selloff in the capital markets. The BSE Sensex climbed by 3.7%, while the Nifty 50 rose by 3.8%, marking their strongest performance in four years. With a more stable geopolitical environment, investors redirected their attention to economic fundamentals, which brightened further after the United States and China moved towards de-escalating their trade tensions, thereby bolstering the global manufacturing outlook.
The technology sector particularly thrived, capitalizing on the improved external demand, with Infosys experiencing a nearly 8% jump, and Wipro, HCL, and TCS each recording gains of over 5.5%. Banks also showed positive momentum, with both ICICI Bank and Axis Bank rising by more than 4.5%. Market participants are now eagerly awaiting the release of tomorrow’s Consumer Price Index (CPI) data, anticipated to show another decline in inflation. This could reinforce expectations for the Reserve Bank of India (RBI) to continue its cycle of interest rate cuts.
