Indian equity benchmarks Sensex and Nifty reversed their losses from this past week as they opened higher on Thursday after US President Donald Trump’s decision to ease tariff threat to European countries, signalling an improvement in geopolitical issues.
Investor confidence also surged with renewed hopes of a breakthrough in the proposed India-US trade deal following Trump’s praise of Indian Prime Minister Narendra Modi at the World Economic Forum in Davos, Switzerland. Trump also declared that a “framework” deal on Greenland had been reached with NATO.
The Nifty 50 index opened at 25,344.15, registering a gain of 186.65 points or 0.74 per cent, while the BSE Sensex opened at 82,459.66, up by 550.03 points or 0.67 per cent.
Market experts said easing global trade tensions provided a key trigger for the rally, which can prove to be a bonus for India despite persistent foreign fund outflows.
“India got this global boost but there was more to come. Talking to an Indian reporter, Trump praised PM Modi and spoke of an imminent trade deal with India. That was the catalyst the Indian markets were seeking. Despite persistent FPI selling, the Trump detente on EU and hope for an Indian trade deal are positives driving Indian markets this morning. We have to watch if this global relief rally continues to gain traction and on the impact on India. Asian markets this morning are celebrating the latest Trump pivot as the prospects of a US- EU tariff war recede,” opined Ajay Bagga, Banking and Market Expert.
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Broader markets also opened firmly in the green. On the NSE, the Nifty 100 surged by 0.72 per cent. The Nifty Smallcap 100 rose by 0.83 per cent, while the Nifty Midcap 100 gained more than 1.2 per cent.
Sectoral indices showed broad-based buying interest. The Nifty Auto index surged by 1.29 per cent, Nifty IT rose by 0.97 per cent, and Nifty Metal gained 0.62 per cent. Nifty PSU Bank advanced by 1.12 per cent, while Nifty Pharma climbed 0.94 per cent. Almost all sectors opened with gains.
On the institutional front, data for Thursday showed that domestic institutional investors (DII) bought shares worth ₹4,181.74 crore, while foreign institutional investors (FII/FPI) sold equities worth ₹1,680.25 crore.
Ponmudi R, CEO of Enrich Money, said he remained concerned about a strong US dollar and sustained FII selling, even though steady DII buying is providing partial support and preventing sharper downside.
“Earnings recovery has been slower than expected, and elevated valuations are undergoing a time-wise correction rather than a sharp price-led decline. The rupee slipping to fresh record lows near 91.69-91.72 against the dollar has intensified concerns around imported inflation and capital outflows,” he added.
In other Asian markets, most indices were trading higher. Japan’s Nikkei 225 surged by 1.95 per cent, Taiwan’s index rose around 2 per cent, and South Korea’s KOSPI gained 1.62 per cent. Hong Kong’s Hang Seng index, however, was down by 0.16 per cent.
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