Indian shares are set to open higher on Monday as India and Pakistan reached a truce over the weekend after intense firing of missiles and drones at each other’s military installations for four days.
The Gift Nifty futures were trading at 24,552.5 as of 8:12 a.m. IST, indicating that Nifty 50 will open about 2% above Friday’s close of 24,008.
The Nifty shed nearly 1.5% in three sessions till Friday as an intensified military action against Pakistan spooked the market.
A fragile ceasefire was holding between India and Pakistan on Sunday, after hours of overnight fighting between the nuclear-armed neighbours.
The conflict, the worst in nearly three decades, began on Wednesday, when India launched strikes on nine sites in Pakistan, which it said were “terrorist infrastructure”, two weeks after militants killed 26 people in Kashmir.
Indian shares fall after India says Pakistan launched multiple attacks
“Assuming both sides adhere to the ceasefire, we expect risk assets in both India and Pakistan to deliver a relief rally,” Barclays said in a note.
On Sunday, the Indian military sent a “hotline message” to Pakistan about violations of a ceasefire agreed this week and informed it of New Delhi’s intent to respond if it was repeated, a top Indian army officer said.
The Pakistan military’s spokesman denied any violations.
Meanwhile, foreign portfolio investors (FPIs) offloaded Indian stocks for the first time in seventeen sessions on Friday, selling shares worth 38 billion rupees ($445 million), per provisional data.Asian stocks and Wall Street stock futures climbed on the day as signs of progress in U.S.-China trade talks eased recession fears.