Mumbai, May 12 || The ceasefire between India and Pakistan has paved the way for a sharp rally in the market and with this, foreign institutional investors (FIIs) are likely to resume their equity purchases in India, analysts said on Monday.
Sensex and Nifty surged more than 2.7 per cent in the morning trade.
According to market watchers, the prime mover of the rally will now be the FII buying, which has been sustained for 16 continuous days except last Friday when the conflict escalated.
“Domestic macros like expectations of high GDP growth and revival of earnings growth in FY26 and declining inflation and interest rates augur well for the resumption of a rally in the market,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
FIIs favour large caps like ICICI Bank, HDFC Bank, Bajaj Finance, L&T, Bharti, Ultratech, M&M and Eicher. Midcap IT and digital stocks are other segments to watch.
Pharma stocks may come under near-term pressure from US President Donald Trump’s latest announcement regarding reducing prices of drugs in the US.
“There are rumours of impending US deal with China on trade but details are yet to come. If a deal materialises that would be good for the global economy,” said Vijayakumar.