Indian Equities Rally as Trump Pauses Tariff Plans; Sensex Gains 665 Points

Market Update at 10:20 AM: Indian equities traded meaningfully higher on Thursday after U.S. President Donald Trump said he would not impose tariffs on European Union nations on February 1, having reached a “framework for a future deal” with NATO on Greenland.

The BSE Sensex index climbed to an Intraday high before settling at 82,575, up 665 points or 0.81 per cent, while the Nifty 50 stood at 25,375, advancing 217 points or 0.86 per cent.

Blue-chip names led the rally, with Eternal, Asian Paints, SBI, Adani Ports, BEL, Tata Steel, IndiGo, M&M, Axis Bank, Sun Pharma, HDFC Bank, ITC, Power Grid, Tech M, Maruti Suzuki, Kotak Bank, and Infosys rising between 0.5 per cent and 6 per cent. Out of the 30 Sensex constituents, 29 traded in the green, with ICICI Bank as the sole laggard.

In the broader markets, sentiment remained bullish. The Nifty MidCap index advanced 1.57 per cent, while the Nifty SmallCap index gained 1 per cent. Notable performers included Waaree Energies (up 10 per cent), Premier Energies, Bank of India, IRB Infra, Ashok Leyland, M&M Finance, MRPL, NCC, Anant Raj, Karur Vysya Bank, and KFin Tech, which recorded strong buying interest.

Sectoral indices also reflected broad-based strength, with all sub-indices trading in the green. The Nifty PSU Bank index led with a 2 per cent jump, followed by the Nifty Pharma and Nifty Auto indices (up 1.8 per cent each), while the Nifty IT index gained 1 per cent.

Pre-Market Update at 7:47 AM: Indian equities are set for a positive opening on Thursday as global sentiment improved on easing geopolitical tensions over Greenland, strong overnight gains on Wall Street, and a firm tone across Asian markets. Gift Nifty was trading near the 25,320 level early Thursday, reflecting a premium of nearly 142 points over the previous Nifty futures close, indicating a gap-up start for the benchmark indices.

On Wednesday, domestic markets extended losses for the third straight session amid volatility. The Sensex declined 270.84 points, or 0.33 per cent, to close at 81,909.63, while the Nifty 50 slipped 75 points, or 0.30 per cent, to settle at 25,157.50. Persistent foreign institutional selling, mixed Q3 earnings, and a sharp fall in the Indian rupee dampened investor sentiment. 

Asian markets opened higher, tracking the overnight rally in the U.S. Japan’s Nikkei 225 gained 1.07 per cent and the Topix advanced 0.79 per cent. South Korea’s Kospi rose 1.62 per cent, breaching the 5,000 level, while the Kosdaq added 1.43 per cent. Hong Kong’s Hang Seng futures also indicated a positive start. Meanwhile, Gift Nifty trading around 25,320 signaled a firm opening for Indian benchmarks with a sizable premium over the previous session’s futures close.

Wall Street recorded a strong session as investors welcomed signs of a Greenland agreement, helping avert the possibility of new U.S. tariffs on Europe. The Dow Jones Industrial Average rallied 588.64 points, or 1.21 per cent, to 49,077.23. The S&P 500 surged 78.76 points, or 1.16 per cent, to 6,875.62, marking its biggest one-day gain in two months. The Nasdaq Composite rose 270.50 points, or 1.18 per cent, to end at 23,224.83.

Chip stocks led gains in the U.S. as Nvidia rose 2.87 per cent, AMD jumped 7.71 per cent, and Intel surged 11.72 per cent. Netflix slipped 2.2 per cent, while United Airlines gained 2.2 per cent. Halliburton advanced 4.1 per cent, EQT Corp climbed 6.5 per cent, and Expand Energy gained 4.5 per cent.

On the geopolitical front, President Donald Trump announced that a framework agreement on Greenland had been reached and that he would not impose tariffs on European allies on 1 February as earlier planned. However, the European Parliament decided to suspend work on a trade deal with the United States after repeated U.S. requests related to Greenland, according to Reuters.

In separate trade developments, Trump expressed optimism on the proposed India–U.S. Bilateral Trade Agreement (BTA), referring to Prime Minister Narendra Modi as a close friend and suggesting both sides were “going to have a good deal.” Meanwhile, EU Foreign Policy Chief Kaja Kallas stated that the European Union had agreed with India to move ahead with a new security and Defence partnership.

Japan’s trade data showed exports rising for a fourth straight month in December, increasing 5.1 per cent year-on-year after a 6.1 per cent rise in November. Imports grew 5.3 per cent year-on-year, resulting in a trade surplus of 105.7 billion yen (USD 667.13 million), below market expectations of a 356.6 billion yen surplus.

Commodity markets reacted to cooling geopolitical tensions with both gold and silver prices declining. Gold fell 0.8 per cent to USD 4,793.96 per ounce and silver dropped 1.3 per cent to USD 91.86 per ounce. Crude oil was mostly steady, with Brent up 0.49 per cent at USD 65.24 per barrel and U.S. WTI crude down 0.15 per cent at USD 60.53 per barrel.

For today, Sammaan Capital and Bandhan Bank will remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.