MUMBAI: After a week of being on edge, stock bulls are betting on a rebound following the India-Pakistan ceasefire.
Nifty futures have already rallied nearly 2%. Positive regional sentiment, fuelled by progress in China-US trade talks, may further boost sentiment.
However, pharma stocks may fall on US President Donald Trump’s plans to lower drug prices.
The ceasefire between India and Pakistan may bring much-needed relief to India’s travel and tourism sector, which relies on the April-June period holiday season driven by school summer breaks.
Rising tensions had stoked concerns about a potential hit to tourism-related spending.
However, with the truce announced on Saturday, the sector looks set to bounce back. That may augur well for shares of companies in the hotels, travel, and airline industries.
Mutual fund data for April showed a slight slowdown in overall equity inflows, but small and mid-cap stocks continued to draw investor interest.
Equity-focused funds took in a net 243 billion rupees (US$2.8bil) during the month, with small and mid-cap plans accounting for 30% of that total.
Net purchases in these categories were even higher than large-cap funds – a surprise given the broader Nifty 200 gauge beat the small-cap measure during the same month.
Coal India’s results once again confirmed the state-run goliath’s ability to deliver higher-than-expected performance, beating consensus earnings in seven of the past eight quarters.
Despite recent softness in coal demand, the company’s pact to supply 4,500MW of renewable power to AM Green Ammonia India is boosting investor hopes for further recovery. — Bloomberg
