Geopolitical Calm and Market Momentum

The Indian equity market is undergoing a dramatic shift, influenced by both domestic and international factors. After heightened tensions between India and Pakistan, the sudden ceasefire provided a much-needed boost to the Indian equity market. This was further supported by a 90-day truce between the United States and China, where both nations agreed to reduce tariffs by 115 percentage points, facilitating a flow of goods from China. This development helped lift the overhang on global growth. All these developments led to a strong rally, with the Indian stock market gaining more than three per cent in a single day on May 12, marking its highest rise in the last four years. Foreign investors had also been on a buying spree for 16 consecutive days between April 15 and May 9, before selling off shares worth `3,800 crore during the peak of these geopolitical tensions.