Dalal Street looked set to breakaway from the negative sentiment on Thursday morning that has been prevalent among equities this week. The BSE Sensex started the day above 82,500, rallying close to 600 points, while the NSE Nifty50 stood at 25,344, rising almost 200 points, as of 9:15 AM.
Both equity benchmarks stood in green even during the pre-open hour, where the Sensex climbed close to 300 points and touched 82,200, and the Nifty tested 25,400, around 9:04 AM. However, the markets still remained highly volatile.
This reversal in the market sentiment came after US President Donald Trump said on Thursday (local time) that he had withdrawn his earlier tariff threats against eight European countries after what he called a “framework of a future deal” on Arctic security and Greenland with Nato Secretary General Mark Rutte.
The decision came after what Trump described as a “very productive” meeting with Rutte, at a time when he has renewed his campaign for greater US influence over Greenland, the autonomous territory governed by Denmark.
Trump announced the move on his social media platform, Truth Social, shortly after his address at the World Economic Forum in Davos, where he reiterated that the United States would not resort to military force to take control of Greenland.
How Did Markets Fare On Jan 21
Notably, the benchmarks extended their losing streak for a third straight session on Wednesday, though they recovered a large part of intra-day losses in a volatile trade as selective buying in heavyweight stocks helped limit the damage amid elevated geopolitical tensions.
After slipping below the psychologically important 82,000 mark during the session, the Sensex ended 270.84 points, or 0.33 per cent, lower at 81,909.63. The Nifty also closed in the red, shedding 75 points, or 0.30 per cent, to settle at 25,157.50.
Market breadth remained weak, with 2,831 stocks declining, 1,437 advancing and 137 remaining unchanged on the BSE, reflecting broad-based caution across the market.
Volatility Persists As Rupee Weakness Weighs
Traders said selling pressure in financials, banking and consumption stocks, combined with a sharp fall in the rupee to record lows against the US dollar, added to the pressure on domestic equities.
“Domestic markets were gripped by volatility as global risk factors dampened sentiment. However, value buying towards the close helped the market recover some early losses. The weakening rupee and uncertainties surrounding trade ties may prolong this volatility,” said Vinod Nair, Head of Research at Geojit Investments Limited.
