Global stock markets are watching closely as the US-backed framework to end the Russia–Ukraine war unfolds. A potential resolution to the biggest European conflict since World War II could lift sentiment and trigger a fresh upside in riskier asset classes.
The Russia-Ukraine war has dragged on for almost four years, beginning on 24 February 2022, when Russia launched a full-scale invasion of Ukraine.
Positive signals suggest the conflict may be nearing its end. US President Donald Trump announced parallel missions to Moscow and Kyiv to push for the proposed US-backed peace plan.
According to news agency AP, Trump will send envoy Steve Witkoff to meet Russian President Vladimir Putin and Army Secretary Dan Driscoll to meet Ukrainian officials.
How can Russia-Ukraine peace deal impact Indian stock market sentiment?
The Indian stock market, which has notable domestic tailwinds, could see a fresh upside as risk-on sentiment strengthens globally. An end to the war would normalise global supply chains, especially across energy, agricultural commodities, metals, and other critical materials disrupted by the war.
With an India-US trade deal nearing and expectations of a rate cut by the US Federal Reserve in December rising, the Russia-Ukraine peace deal could provide another significant boost.
“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,” said Sugandha Sachdeva, Founder of SS WealthStreet.
“Adding to the supportive environment, global cues have turned constructive amid renewed expectations of a US Fed rate cut in December, triggered by dovish Fed commentary and weaker US macro data. This has pushed the probability of a December rate cut to nearly 80%, softening the dollar and improving global liquidity conditions,” said Sachdeva.
Sachdeva pointed out that with the dollar easing and geopolitical tensions moderating, the overall backdrop looks increasingly supportive for Indian equities.
On the sectoral front, easing geopolitical tensions and the possibility of lower crude oil prices could have a divergent impact. Sector-wise, easing tensions and softer crude prices may temper sentiment in defence stocks and upstream oil exploration companies. However, lower crude is a strong positive for OMCs, paints, tyres, aviation, and other cost-sensitive sectors, said Sachdeva.
Seema Srivastava, Senior Research Analyst at SMC Global Securities, also believes that the reported Ukraine peace deal is expected to boost Indian equities with a risk-on bias, driven by sectors that benefit from lower crude oil prices and improved global sentiment.
Srivastava believes energy-intensive segments, such as paints (Asian Paints, Berger Paints), adhesives (Pidilite), tyres (MRF, Apollo Tyres), logistics, airlines (IndiGo), and broader consumption (HUL, ITC, DMart), may see increased buying interest due to potential margin relief and softer inflation.
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), are likely to react positively to cheaper crude oil and LNG expectations, said Srivastava.
Rate-sensitive sectors, such as banks (HDFC Bank, ICICI Bank, SBI) and non-banking financial companies (NBFCs), like Bajaj Finance, may gain due to reduced medium-term inflation and RBI tightening risk, supporting credit growth and valuations.
In contrast, defence stocks (HAL, BEL, Bharat Dynamics) and some metal/commodity plays may face near-term profit-taking as the war-premium narrative cools. Export-oriented IT and pharma sectors could be muted or see mild pressure due to potential rupee appreciation, Srivastava added.
Read all market-related news here
Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
