India, Pakistan Stock Markets Surge 3%, 9.2% on Ceasefire

India and Pakistan's stock markets surged following an unexpected ceasefire agreement over the weekend. Investors have shifted their focus back to improving economic prospects. India's NSE Nifty 50 index rose by 3%, marking its largest gain in nearly a year, as investors welcomed the pullback from the brink of war and the ceasefire agreement between India and Pakistan. Pakistan's benchmark KSE-30 index soared by 9.2%, its biggest gain since 2008.

Vivek Dhawan, a fund manager at Candriam, noted, "Considering the speed at which events escalated last week, the developments over the weekend represent a positive step forward." He added, "The focus may now shift back to India's growth narrative."

In Pakistan, traders anticipate that economic reforms will once again take center stage. The heightened border tensions had overshadowed Pakistan's central bank's surprise rate cut and the prospect of further assistance from the International Monetary Fund. The International Monetary Fund approved a $10 billion emergency allocation and a new $14 billion climate adaptation plan on Friday, providing a boost to Pakistan's fragile finances.