Indian equity benchmarks extended their intraday gains after a foreign ministry spokesperson tweeted that India and China have agreed to disengage border troops at the “face-off” site of Doklam.
The news has added to the relief that one more irritation point is out of the system, said Ajay Srivastava, managing director at investment advisory Dimensions Consulting.
Troops of the two countries have been locked in a standoff at Doklam near Sikkim in the northeast since June after Indian troops stopped the Chinese army from building a road in the area.
“Given that China's hands are full with North Korea, Japan, South China Sea, and certain issues around Korea, one wasn't expecting anything great to happen,” Srivastava told BloombergQuint over the phone.
So, nothing positive comes out of it except the feel-good factor.
The benchmark S&P BSE Sensex climbed as much as 0.7 percent to 31,809 while the NSE Nifty 50 Index rose 0.7 percent to 9,925. Both the indices gained for a fourth straight session, on track for their longest winning streak in six weeks, buoyed by Nandan Nilekani’s return to lead Infosys Ltd. and end hostilities between founders and the board.
The Indian rupee too extended gains by 0.3 percent to 63.86 per dollar, its strongest level in nearly three weeks, following the report.
Eased tensions between the two countries would improve the currency outlook, said Deven Choksey, managing director of broking firm KR Choksey. “It will result in greater confidence among global investors, willing to put money in Indian businesses,” he told BloombergQuint in an interview.
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