The US-backed framework to put an end to the conflict between Russia and Ukraine is being eagerly watched by global stock markets. Riskier asset classes may see a new upswing if the largest European conflict since World War II is resolved.
Since Russia began a full-scale invasion of Ukraine on February 24, 2022, the conflict between Russia and Ukraine has lasted for nearly four years.
Positive signals indicate that the disagreement may be coming to an end. In order to promote the suggested US-backed peace proposal, US President Donald Trump announced parallel delegations to Moscow and Kyiv.
Trump will send Army Secretary Dan Driscoll to see Ukrainian officials and envoy Steve Witkoff to meet Russian President Vladimir Putin, according to news agency AP.
What effect might the peace agreement between Russia and Ukraine have on the mood of the Indian stock market?
As risk-taking mood grows worldwide, the Indian stock market, which has significant local tailwinds, may experience a new upswing.
Trump will send Army Secretary Dan Driscoll to see Ukrainian officials and envoy Steve Witkoff to meet Russian President Vladimir Putin, according to news agency AP.
What effect might the peace agreement between Russia and Ukraine have on the mood of the Indian stock market?
As risk-taking mood grows worldwide, the Indian stock market, which has significant local tailwinds, may experience a new upswing.
According to Sugandha Sachdeva, founder of SS WealthStreet, "an end to the war would normalize global supply chains, especially across energy, agricultural commodities, metals, and other critical materials disrupted by the war."
The Russia-Ukraine peace agreement may offer yet another big boost as an India-US trade agreement draws closer and hopes of a rate drop by the US Federal Reserve in December rise.
"The progress toward a negotiated end to the war is already helping unwind the geopolitical risk premium and is likely to significantly favour risk-on sentiment in global financial markets," Sachdeva added.
The Russia-Ukraine peace agreement may offer yet another big boost as an India-US trade agreement draws closer and hopes of a rate drop by the US Federal Reserve in December rise.
"The progress toward a negotiated end to the war is already helping unwind the geopolitical risk premium and is likely to significantly favour risk-on sentiment in global financial markets," Sachdeva added.
"Dovish Fed speech and poor US macro data have sparked increased anticipation of a US Fed rate cut in December, adding to the positive atmosphere. This has softened the currency and improved global liquidity conditions, increasing the likelihood of a December rate decrease to around 80%, according to Sachdeva.
Sachdeva noted that the overall environment is more favorable for Indian stocks as the currency weakens and international tensions subside.
Sachdeva noted that the overall environment is more favorable for Indian stocks as the currency weakens and international tensions subside.
Reducing geopolitical tensions and the potential for lower crude oil prices could have different effects on the sectoral front. Sector-wise, confidence in defense stocks and upstream oil exploration firms may be tempered by a reduction in tensions and a drop in crude prices. However, Sachdeva noted that OMCs, paints, tires, aircraft, and other cost-sensitive industries would greatly benefit from reduced crude.
According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, industries that profit from lower crude oil prices and better sentiment throughout the world are projected to propel Indian shares with a risk-on bias in response to the reported peace deal with Ukraine.
According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, industries that profit from lower crude oil prices and better sentiment throughout the world are projected to propel Indian shares with a risk-on bias in response to the reported peace deal with Ukraine.
Due to possible margin relief and lower inflation, Srivastava thinks that energy-intensive industries like paints (Asian Paints, Berger Paints), adhesives (Pidilite), tires (MRF, Apollo Tyres), logistics, airlines (IndiGo), and general consumption (HUL, ITC, DMart) may see an increase in buying interest.
According to Srivastava, lower crude oil and LNG expectations are likely to have a positive impact on public sector undertaking (PSU) oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL), as well as city gas and downstream gas players (IGL, MGL, Gujarat Gas).
Reduced medium-term inflation and RBI tightening risk may benefit rate-sensitive industries including banks (HDFC Bank, ICICI Bank, SBI) and non-banking financial corporations (NBFCs), such Bajaj Finance, encouraging credit expansion and valuations.
According to Srivastava, lower crude oil and LNG expectations are likely to have a positive impact on public sector undertaking (PSU) oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL), as well as city gas and downstream gas players (IGL, MGL, Gujarat Gas).
Reduced medium-term inflation and RBI tightening risk may benefit rate-sensitive industries including banks (HDFC Bank, ICICI Bank, SBI) and non-banking financial corporations (NBFCs), such Bajaj Finance, encouraging credit expansion and valuations.
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