Context:

A cease-fire between India and Pakistan has led to a return to normalcy, with civilian flights resuming and stock markets in both countries experiencing significant gains. The cease-fire followed intense fighting that stemmed from a terrorist attack in Kashmir, which India attributed to groups supported by Pakistan, leading to retaliatory airstrikes. Both nations engaged in cross-border shelling and escalated air confrontations before a U.S.-mediated cease-fire was announced. Despite the cease-fire, the situation remains fragile with many displaced from their homes, but no major breaches have been reported since the agreement. Military leaders from both countries are expected to assess the cease-fire's future, while financial markets remain optimistic about the agreement holding steady.

Dive Deeper:

• The cease-fire agreement between India and Pakistan has been holding, leading to a resumption of civilian flights and a surge in stock markets in both nations, reflecting renewed confidence among investors.

• The recent conflict was triggered by a terrorist attack in Kashmir, attributed by India to groups allegedly supported by Pakistan, prompting retaliatory strikes on what India described as terrorist facilities in Pakistan.

• The fighting saw both countries engaging in cross-border shelling and airstrikes, with India targeting deeply within Pakistan for the first time in decades, while Pakistan retaliated with its own military actions.

• The cease-fire was announced by President Trump following U.S. mediation efforts, continuing a historical pattern of international intervention to de-escalate tensions between the two nuclear-armed neighbors.

• While the cease-fire has brought a semblance of peace, the situation remains precarious with tens of thousands of people still displaced, though no significant violations have been reported since the truce began.

• Despite the calm restored by the cease-fire, both India and Pakistan have not yet provided updates on future military engagements or long-term peace strategies, creating lingering uncertainties.

• Financial markets have responded positively, with Pakistan's Karachi 100 index hitting a record high and India's markets recovering losses from the previous week's turmoil, indicating economic optimism.