Nifty Set for Gap-Up Start after India-Pak Tensions Ease

A set of developments during the weekend is expected to affect the investor sentiment during today’s trading session. One of these developments is the announcement of a halt in the military action between India and Pakistan on Saturday evening, which had kept the stock markets on the edge until Friday. Although there were reports of breach of mutual understanding from the Pakistan side within a few hours of the announcement, Sunday remained largely peaceful along the international border.  

The headline indices are expected to have a gap-open start today tracking global cues. The 50-stock Nifty 50 index is expected to open somewhere near 500 points higher today after it closed in red for two consecutive sessions. The index ended over 1% lower on Friday, and barely managed to close above the 24,000-mark. Today, the Gift Nifty was trading 2% higher.

While the stock market has remained resilient during the conflict, it still has lost nearly 2% since May 7, when India launched ‘Operation Sindoor’. The NSE headline index has lost 0.7% since the Pahalgam terror attack, prompting India to launch ‘Operation Sindoor’.  

The other major development which is also expected to affect the sentiment is the announcement by the US and China citing "substantial progress" in trade talks, which took place in Geneva over the weekend. Describing the discussions as “very good” and “a total reset negotiated in a friendly, but constructive, manner”, the US President Donald Trump posted on his Truth Social handle, “We want to see, for the good of both China and the US, an opening up of China to American business.”

Markets will be closely watching this development, as it could erode the competitive edge India had gained. According to The Indian Express report, trade tensions between the US and China had benefited India as American buyers had started shifting to Indian suppliers following the imposition of high tariffs on Chinese goods. But a potential US–China trade agreement may allow Chinese exporters to reclaim lost ground.