India-Pak ceasefire: Nifty50, Sensex rally nearly 3%, investor wealth rises by ₹13 lakh cr; is the worst over for D-Street?

The bulls took full control of D-Street on Monday as the Indian share market witnessed broad-based buying after India and Pakistan agreed to an immediate ceasefire. Investors saw a boost in wealth, with the total market capitalisation of BSE-listed firms soaring by ₹12.6 lakh crore to ₹429.15 lakh crore in the first hour of trade so far, compared to ₹416.51 lakh crore in the previous session. 

The BSE benchmark Sensex surged as much as 2,376 points, or 3%, to hit a high of 81,830, and the NSE Nifty jumped 730 points, or 3%, to touch 24,738 in early trade today. The broader market also saw strong buying, with the BSE mid-cap and small-cap indices zooming nearly 4%.

Of the BSE Sensex pack, barring Sun Pharma, all 29 index heavyweights were in the green, with Infosys, Axis Bank, Adani Ports, NTPC, and HCLTech leading the gainers’ chart, rising by up to 5%.

Reliance Industries Ltd (RIL), the country’s most valued firm, was up 3.3%, while Tata Consultancy Services (TCS), the second most valued stock, gained 2.7%.

On the sectoral front, all indices, barring pharma and healthcare, were trading in the green, led by realty, aviation, metal, IT, financial services, private bank, and oil sectors.

Shares of aviation companies InterGlobe Aviation-owned IndiGo and SpiceJet rose up to 10% in early trade amid easing in India-Pakistan tensions after a ceasefire announcement.

The defence space saw a mixed trend, with index heavyweights Hindustan Aeronautics (HAL) and Paras Defence slipping to red, while Bharat Electronics (BEL), Bharat Dynamics, Mazagon Dock Shipbuilders, Cochin Shipyard, Data Patterns, and Garden Reach Shipbuilders and Engineers (GRSE) rising by up to 5%.

Meanwhile, the pharma and healthcare sectors were reeling under selling pressure after U.S. President Donald Trump promised to sign an executive order that will reduce drug prices in the US “almost immediately” by 30-80%. Weighed down by the development, shares of Sun Pharma, Lupin, Biocon, Aurobindo Pharma, and Divis Laboratories declined by up to 7%, while Dr. Reddy's Laboratories shares jumped 4% as investors reacted to its Q4 results.

Market outlook

India's share market has demonstrated remarkable resilience, despite escalated border tensions with Pakistan, because of a promising long-term outlook that stems from robust business growth prospects driven by its youthful demographic and thriving digital technology sector.

"The ceasefire between India and Pakistan has paved the way for a sharp rally in the market. The prime mover of the rally will 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 VK Vijayakumar, Chief Investment Strategist, Geojit Investments. 

However, any further escalation of tensions between India and Pakistan will be the biggest overhang on the market which can drag the indices lower, SBI Securities said in a note. On the other hand, if the situation deescalates, it sees a sharp recovery in the market.

 “The zone of 23,850-23,800 will act as crucial support for the Nifty50 index. If the index slips below the level of 23,800, then the 100-day EMA zone of 23,560-23,500 will act as the next crucial support for the index. While, on the upside, the zone of 24,250-24,300 will act as a crucial hurdle for the index,” SBI Securities said in a report.

From a technical perspective, the Nifty is currently hovering around key moving averages across various timeframes, suggesting the potential for further downside, says Ajit Mishra, SVP-Research, Religare Broking. The immediate support is placed at 23,800, and a decisive break below this level could extend the decline toward 23,200. On the upside, any rebound is expected to encounter strong resistance in the 24,400–24,600 range, he said.

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