Shares of InterGlobe Aviation (commonly known as IndiGo) and SpiceJet experienced a remarkable increase of 10% during trading on Monday. This surge came on the heels of a significant agreement between India and Pakistan to cease all military operations across land, air, and sea. The easing of tensions between these two nations has sparked optimism regarding the revival of airline operations, marking a hopeful turn in the regional landscape.
Positive Market Reactions to Geopolitical Developments
The recent agreement follows India’s Operation Sindoor, launched on May 7, which aimed at neutralizing terror networks in Pakistan and Pakistan-occupied Kashmir in response to a terror incident in Pahalgam. This backdrop of reduced military activity has prompted a wave of investor confidence, especially after the Indian government greenlit operations at 32 airports in border areas including Jammu and Kashmir and Punjab. These airports had been closed due to the conflict, and the Notice to Airmen (NOTAM) was issued just two days post-agreement.
Stock Market Surge Amid Eased Tensions
The stock market also responded positively, witnessing a significant rebound. The Sensex soared by 2,500 points, while the Nifty 50 surpassed 24,700, marking the most substantial single-day gain in 11 months. This boost in market indices reflects not only the calming geopolitical situation between India and Pakistan but also favorable discussions surrounding US-China trade, enhancing overall investor sentiment.
Stock Performance of IndiGo and SpiceJet
IndiGo’s shares opened at ₹5,434.70 on the BSE, reaching an intraday high of ₹5,599 and a low of ₹5,413.60. According to Anshul Jain, Head of Research at Lakshmishree Investments, the stock’s bullish opening indicates a potential breakout zone near ₹5,600. Jain suggests that sustaining above this level could pave the way for a rise towards ₹6,000. He advises traders to watch for robust buying activity above ₹5,600 to confirm this breakout, while emphasizing that ₹5,375 serves as a crucial support level. A dip towards this mark could attract buying interest.
SpiceJet’s share price opened at ₹46.20 on the BSE, with an intraday high of ₹47.69 and a low of ₹45.94. Jain noted that SpiceJet has been trading within a tight range of ₹42 to ₹52 for the past 88 days, without any clear breakout signals. For those looking to trade within this range, Jain suggests focusing on the extremes, while cautioning that such strategies can be less rewarding. He advises that fresh long positions should only be considered on a confirmed breakout above ₹52, urging traders to wait for clearer momentum before taking action.
Conclusion
The recent developments between India and Pakistan have not only influenced airline stocks like IndiGo and SpiceJet but have also revitalized market confidence more broadly. As geopolitical tensions ease, investors are hopeful for a more stable environment, paving the way for potential growth in the aviation sector and beyond. Keep an eye on these stocks as the situation continues to evolve.
