Calm Restored, Confidence Reignited
The Indian stock market opened the week on a buoyant note, registering one of its strongest rallies in recent months. The benchmark Sensex soared 1,800 points while the Nifty jumped 500 points in early trade on Monday, reflecting renewed investor confidence following the ceasefire agreement between India and Pakistan. This uptick comes amid easing geopolitical tensions and improved global sentiment.
Peace Triggers Market Euphoria
The rally was prompted by Saturday’s (May 10) ceasefire understanding between India and Pakistan, which followed a tense week of cross-border military exchanges. Investors welcomed the cessation of hostilities, perceiving it as a critical de-escalation that could stabilize the region. Ajay Bagga, a prominent market and banking expert, noted that Indian markets had absorbed recent shocks well and were primed for a strong rebound. “All losses due to the kinetic conflict have been made up. The resilience of Indian markets has been exceptional,” he remarked.
Sectoral Highlights: Realty and IT Lead the Charge
Among sectoral indices, Nifty Realty stood out with a 4% gain, followed by Nifty Auto and Nifty IT, which rose by 2.25% and 2.16% respectively. The upbeat performance indicates investor confidence in domestic growth sectors, especially those linked to infrastructure and consumption, which typically benefit from a stable macroeconomic environment.
On the corporate front, top gainers on the Sensex included Axis Bank, Adani Ports, Bajaj Finserv, and Bajaj Finance. On the Nifty 50, Adani Enterprises, Jio Financial Services, and Shriram Finance were among the major winners.
Global Winds Support Bullish Sentiment
Positive cues from global markets further lifted investor morale. Over the weekend, trade negotiations between the US and China in Geneva were described as both “productive and positive,” easing fears of global economic disruption. Meanwhile, gold prices dropped by over 2%, suggesting a retreat from safe-haven assets, while oil prices and the US dollar edged higher.
US stock futures also pointed to a more than 1% gain, indicating optimism was not limited to Indian markets alone.
Ratings Boost: Sovereign Upgrade Lifts Investor Mood
Adding to the bullish sentiment was Morningstar DBRS’s upgrade of India’s sovereign rating to BBB (stable) from BBB (low). The move was seen as a validation of India’s macroeconomic stability despite recent geopolitical stress. Devarsh Vakil of HDFC Securities highlighted the upgrade as a “buoyant signal for bulls,” underscoring India’s long-term investment appeal.
Pharma Lags Behind Amid Pricing Concerns
In contrast to the broader rally, pharmaceutical stocks underperformed, declining 1.3%. This sector-specific dip followed remarks by US President Trump about signing an executive order aimed at slashing prescription drug prices to match those paid by other high-income nations. Eight of the 20 stocks on the pharma sub-index traded in the red despite the Nifty gaining 2.4% overall.
A Fragile Calm, But Strong Market Pulse
While the market surge reflects a vote of confidence in peace and economic prospects, investors remain cautious of potential reversals in sentiment should geopolitical tensions flare again. Nevertheless, the swift recovery illustrates India’s market resilience and investor faith in its underlying economic fundamentals. The rally serves as a reminder that while geopolitics can unsettle markets, peace—even tentative—can swiftly reignite optimism.
(With inputs from agency)
