Amid heightened tensions, Pakistan was granted a bail-out package of $2.3 billion by the International Monetary Fund (IMF)

Stocks in India and Pakistan are set for a relief rally following a surprise ceasefire agreement between the two nuclear-armed neighbors on Saturday, as investor focus shifts back to improving economic outlook.

Indian shares logged their best session in more than four years on Monday, surging nearly 4% in a broad-based relief rally after the country reached and held a fragile ceasefire with Pakistan over the weekend after days of cross-border clashes.