Benchmark indices opened sharply higher on Thursday, staging a strong recovery after three consecutive sessions of decline, as global risk sentiment improved following US President Donald Trump’s decision to roll back tariff threats against European nations. The opened at ₹82,459.66, up from its previous close of ₹81,909.63, and was trading at ₹82,742.16, gaining 832.53 points or 1.02 per cent at 9.50 a.m. The opened at ₹25,344.15 against its previous close of ₹25,157.50 and surged to ₹25,424.70, up 267.20 points or 1.06 per cent.
The rally was driven by Trump’s announcement of a framework agreement on Greenland and the cancellation of planned tariffs on European nations, which lifted global markets overnight. “Wall Street surged on Wednesday, with the S&P 500 posting its largest one-day gain in two months after President Trump announced a framework agreement on Greenland and cancelled planned tariffs for February 1st on European nations,” said Devarsh Vakil, Head of Prime Research at HDFC Securities. The Dow jumped 588 points or 1.2 per cent, while both the S&P 500 and Nasdaq rose 1.2 per cent.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, described the development as classic Trump behaviour. “In yet another classic TACO (Trump Again Chickens Out) President Trump has withdrawn from his threat to annex Greenland by force, if necessary,” he said. “More importantly, the message that the US would refrain from imposing tariffs on Europe takes away the threat of a US-Europe trade war which was dragging the markets down.”
The pharmaceutical sector led the gains, with surging 4.67 per cent to ₹1,211.20. climbed 3.34 per cent to ₹2,100.00, while rose 3.15 per cent to ₹349.95. Adani Ports added 3.10 per cent to ₹1,421.30, and Tata Steel gained 2.81 per cent to ₹189.60. Only two stocks declined among Nifty constituents, with Max Healthcare slipping 0.39 per cent to ₹1,000.30 and ICICI Bank marginally lower at 0.05 per cent to ₹1,348.30.
Ponmudi R, CEO of Enrich Money, noted the improved global tone could help stabilise domestic markets. “The easing of trade and geopolitical concerns has lifted global risk appetite, triggering a rebound in risk assets and some profit-taking in safe-haven gold and silver,” he said. “The improved global tone may help stabilise domestic markets after two sessions of sharp selling, though investors are likely to remain cautious.”
However, domestic headwinds persist. The Indian rupee fell to a record low of ₹91.69 against the US dollar in the previous session, intensifying concerns around imported inflation and capital outflows. India VIX surged nearly 20 per cent over the last three sessions, reflecting rising uncertainty. “The rupee slipping to fresh record lows near ₹91.69–91.72 against the dollar has intensified concerns around imported inflation and capital outflows,” Ponmudi added.
Foreign institutional investors have sold ₹34,041 crore this month, while domestic institutional investors provided partial support. Shrikant Chouhan, Head Equity Research at Kotak Securities, highlighted technical levels. “On the downside, 25,000/81,700 and 24,950/81,500 will act as key support zones, while 25,300/82,600 and 25,350/82,800 could act as key resistance levels for bulls,” he said.
Aakash Shah, Technical Research Analyst at Choice Equity Broking, cautioned that sentiment remains fragile. “Indian equities are likely to begin Thursday’s session on a cautious to mildly mixed note, as markets attempt to stabilize after three consecutive days of decline,” he said. “Overall sentiment remains fragile amid persistent foreign fund outflows, currency weakness, and subdued risk appetite.”
Dr. Vijayakumar noted the market construct favoured short-covering. “The consequent relief rally in the market today can be significant since there are about 2 lakh short contracts in the market and the market construct is right for short-covering,” he said.