The recent announcement of a ceasefire between India and Pakistan has sparked optimism among investors, leading to expectations of a rebound in the stock markets of both countries.
India: Anticipated Market Recovery
Indian stock markets are poised for a potential recovery following the ceasefire agreement. Foreign investors, who had been on a 16-day buying streak in Indian shares until the clashes flared up, may resume flows as volatility subsides. Analysts predict that the Nifty 50 index may show signs of a rebound, with immediate support at 23,800 and resistance at 24,200.
Pakistan: Positive Economic Indicators
In Pakistan, the stock market is also expected to benefit from the ceasefire. The International Monetary Fund’s approval of $1 billion in immediate disbursement, along with a new $1.4 billion plan for climate resilience, is anticipated to boost the country's fragile finances. Additionally, the Pakistan Stock Exchange (PSX) recently rebounded after a four-day losing streak, with the benchmark KSE-100 index surging 756 points, driven by positive economic indicators such as a decade-low inflation rate of 1.5% year-on-year in February.
Outlook
While the ceasefire has injected a sense of optimism into the markets, analysts caution that sustained recovery will depend on the durability of the truce and the implementation of supportive economic policies. Investors are advised to monitor geopolitical developments and economic indicators closely in the coming weeks.