Opening Bell: Sensex, Nifty to open higher after Indo-Pak ceasefire, US-China trade deal; defence, aviation, pharma stocks eyed

The Indian share market is set to begin the week on a solid note, with the benchmark indices, the BSE Sensex and the NSE Nifty poised for a strong rally in opening trade. Firm cues from Asian stocks after the U.S.-China trade deal and positive trends in GIFT Nifty futures amid an ease in India-Pakistan tensions after a ceasefire announcement are set to boost market sentiment. At 8:10 AM, the GIFT Nifty Futures were trading 460 points, or 1.9%, higher at 24,549, indicating a surge in buying activities in opening trade.

Shares of defence companies such as Hindustan Aeronautics (HAL), Bharat Electronics, Mazagon Dock Shipbuilders, Paras Defence, Data Patterns, and Garden Reach Shipbuilders and Engineers (GRSE) will be in focus amid recent geopolitical tensions. The listed aviation stocks, IndiGo and SpiceJet, will also react as the airports Authority of India (AAI) has announced the temporary closure of 32 airports across northern and western India for all civilian flight operations until May 15. Shares of pharma companies such as Dr Reddy's, Cipla, Lupin, Aurobindo Pharma, Sun Pharma, and Zydus Lifesciences will be eyed after the U.S. President Donald Trump made an important announcement on medicine pricing in the United States on his social media platform, TRUTH SOCIAL.

Last week, the equity benchmarks, the BSE Sensex and the NSE Nifty50, registered a weekly loss of around 1.5%, snapping a three-week-long gaining streak, as the market witnessed a surge in volatility and indecisive trading amid escalated border tensions between India and Pakistan. The Sensex slipped below the crucial level of 80,000 and the Nifty ended near 24,000, as the domestic market came under pressure as geopolitical tensions intensified, while its neighbouring counterpart, Pakistan stock market (Karachi Stock Exchange) crashed like a house of cards.

Asian markets rally on U.S.-China trade deal

Equity markets in the Asia-Pacific region witnessed positive trade on Monday, with Hong Kong and Taiwan rallying over 1% after the U.S. announced a trade deal with China in Geneva. The sentiment was lifted on confirmation that the world’s two largest economies had made substantial progress on trade talks.

Cheering the news, Hong Kong’s Hang Seng index rallied over 1.2%, the Taiwan Weighted index jumped over 1%, and China’s Shanghai Composite added over 0.5% in early trade. Japan’s Nikkei 225 was trading flat with marginal gains, while South Korea’s Kospi gained 0.5%.

Wall Street ends lower on Friday

U.S. stocks ended the week on a negative note, ending marginally lower as caution prevailed ahead of weekend trade talks with China. The Dow Jones Industrial Average declined 0.29%, while the S&P 500 and the Nasdaq Composite closed flat. For the week, the S&P 500 fell 0.47%, the Nasdaq lost 0.27%, and the Dow dropped 0.16%.

India-Pakistan Conflict

Traders will keep a close eye on developments on tensions between India and Pakistan after both countries agreed to a ceasefire and mutually decided to stop all firing and military action on land, air and sea. 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.

Q4 results today

Shares of Tata Steel, Jyothy Labs, Ather Energy, Raymond, Bajaj Electricals, Thomas Cook (India), Morepen Laboratories, UPL, PG Electroplast, Carborundum Universal, Chalet Hotels, Ventive Hospitality, Vijaya Diagnostic Centre, JM Financial, Happiest Minds Technologies, TD Power Systems, Raymond Lifestyle, KRN Heat Exchanger and Refrigeration, SRF, Zaggle Prepaid Ocean Services, CARE Ratings, Artemis Medicare Services, and many others are set to release their earnings reports today.