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After falling for three days, the domestic equity market on Thursday started the session on a strong note amid positive global cues, with the BSE Sensex trading nearly 813 points higher to trade at 82,722.49 and the NSE Nifty rising above 25,400 to trade nearly 256 points higher at 25,402.23.
All sectors traded in green. PSU banks, auto, media, metal, and IT were the top gainers.
Trade Deal Optimism
US President Donald Trump on Wednesday struck an upbeat note on the outlook for India-US trade relations, lauding Prime Minister Narendra Modi and expressing confidence about the prospects of a bilateral trade agreement.
In an interaction with Moneycontrol, Trump said he holds Modi in high esteem and referred to him as a close friend while responding
to a question on the India–US trade deal. “I have great respect for your Prime Minister. He’s a fantastic man and a friend of mine. We are going to have a good deal,” the US President said.
Trump made the remarks after delivering his address at the 56th Annual Summit of the World Economic Forum, underscoring his optimism about stronger economic engagement between the two countries.
Easing Geopolitical Tensions
The rally comes after a rebound in global equities after US President Donald Trump ruled out the use of force to seize Greenland and dropped plans for new tariffs on European allies, easing market jitters.
Strong Global Cues
Other Asian markets rose 1%, tracking an uptick in Wall Street equities overnight. 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.
V K Vijayakumar, chief investment strategist at Geojit Investments Limited, said, “In yet another classic TACO ( Trump Again Chickens Out) President Trump has withdrawn from his threat to ‘annex Greenland by force, if necessary’.”
Instead, in Davos yesterday Trump said “we have reached a framework of a future deal on Greenland”. 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 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.”
The Q3 profitability of companies have been affected by higher provision for the new labour code commitments. But the market will shrug it off since this is a one time commitment. Among results announced yesterday Eternal stands out with better-than-expected revenue and profit growth from quick commerce business, Vijayakumar added.
Technical View
Shrikant Chouhan, head (equity research), Kotak Securities, said, “We believe that, given the intraday market volatility, level-based trading would be an ideal strategy for day traders. On the downside, 25,000/81700 and 24,950/81500 will act as key support zones, while 25,300/82600 and 25,350/82800 could act as key resistance levels for bulls. Above 25350/82800, Nifty could move towards 25500/83300. Reduce weak long positions between 25500-25600. The strategy should be to buy Nifty above 25350, but with a tight stop loss at 25250.”
