100 days of the LOC ceasefire: Fragile peace?, and Best stocks to buy in the Indian stock market!
Current Affairs, Opinion x Finance
On the eve of completion of 100 days of the ceasefire with Pakistan at the Line of Control, Army Chief Gen. M.M. Naravane, on June 2, 2021, reached Kashmir on a two-day visit to review the situation on the ground at the border and counter-terrorist operations in the valley.
When did this ceasefire begin?
On February 25, 2021, the director-general of military operations on the two sides decided to strictly implement the ceasefire. The ceasefire, the sources said, has held up since then, barring one round of firing between the Border Security Force (BSF) and the Pakistan Rangers along the international border.
How was the ceasefire established?
India and Pakistan agreed to a ceasefire along their tense border in 2003, but it was never followed after an initial spell of silence.
So how did it happen this time?
This time, a third party, the UAE, actively mediated and brought both countries on the table for this ceasefire. As Bloomberg reported, the Emiratis brokered the negotiations between India and Pakistan that led to an unexpected announcement that the South Asian rivals would respect their 2003 ceasefire agreement, despite heightened tensions between them.
Why did the UAE intervene?
UAE wants to project itself as a peace broker. UAE has shifted its attention away from military projection to diplomacy, investment and other forms of soft power.
This ceasefire also plays into the UAE’s pursuit of other important foreign-policy objectives. It hopes to deepen its partnership with Washington by paralleling American efforts to resolve the conflict in neighboring Afghanistan, where India and Pakistan have competing economic and security interests.
Why is the 100 days ceasefire unprecedented?
100 days at the Line of Control (LoC) have passed without a single bullet being fired between the Indian and the Pakistani forces, bringing in a sense of calm for civilians.
According to official figures, the total number of ceasefire violations this year stands at 592. Of this, 591 took place before February 25, 2021. In comparison, between January 1, 2020, and June 1, 2020, Pakistan violated the ceasefire a total of 1,531 times.
In all, 2020 saw 4,635 ceasefire violations, up from 3,233 in 2019.
However, terror infrastructure still active
The terror infrastructure in Pakistan-occupied Kashmir is far from being dormant, despite the dip in skirmishes between the two armies.
On June 1, different groups of terrorists gathered in the Lipa Valley opposite Keran, Naugam and Rampur sectors, according to intelligence reports while 24 terrorists began training in May.
Reportedly, the terror groups still have all the support of the Pakistan Army even though there has been a decision to restore the ceasefire and no violations have taken place since February 25.
Why is this ceasefire ‘fragile’?
India and Pakistan might have decided to implement the ceasefire agreement of 2003 to maintain peace at the borders but there is no commitment from Islamabad to stop sponsoring terror, government sources said.
Sources say that “None of the other peace initiatives is yet to be formalised. Hence, the current ceasefire can be termed fragile”.
How to ensure a long-lasting and effective ceasefire?
Both countries must initiate diplomatic ties along with the appointment of high commissioners and bilateral and multilateral forum talks.
Pakistan must take down all terrorist launchpads, especially in PoK, and cut links between the ISI and terrorist groups. To achieve this, Pakistan needs a strong democratic government which is not a puppet of the army.
Best stocks to buy in the Indian stock market!
Nifty was trading at 7600 levels on March 23, last year. Today, it is trading at 15700 levels. Safe to say, it has been an insane bull rally. While some got in early, others missed that bus! If you’re in the latter category, this post is for you!
If you’ve been actively looking for stocks to invest in, you already know that most stocks are trading very high values. However, in my opinion, three sectors have tremendous potential to rally further. A lot of this is coming from the learnings of trading the post-wave 1 markets.
Hospitality industry
If you’re an active Instagram user, you know that most of your friends were in Goa in late 2020 and early 2021. That is a classic example of pent-up demand. We can expect to see a similar, if not more, demand this year as well! I hypothesize that the hospitality industry will see the biggest spike in the Oct-Nov-Dec quarter of 2021 in recent history.
Hence, stocks like TajGVK, DeltaCorp, Club Mahindra might see a bull run soon. They’ve already started the move but are available at affordable prices.
IT industry
This has been amongst the most reliable industries in the Indian Stock Exchange in the past decade and it will only get better. Every company is taking the digitization route and stocks like TCS, Infosys, Wipro, HCL Tech have benefitted.
They’ve registered record numbers in the last two quarters and it doesn’t seem like the juggernaut will stop any time soon. Moreover, stocks like TCS and HCL Tech have recently corrected and are off-highs which seems like an anomaly!
Auto industry
Owing to the lockdown, the auto industry saw a steep decline in sales. The shares of Maruti paint a clear picture. While the sales might continue to go down for another couple of months, the speculation of improved sales might push the shares higher in the medium term. We saw a similar price rise even between wave one and wave two.
Even though Nifty is trading at record highs, I won’t be surprised if it continues the momentum. The liquidity in the market is very high and the bullish global stock markets add more fuel to this engine!
Do you think a correction is on the cards or will the rally continue?
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