Indian equity markets staged a sharp intraday recovery on Thursday after early morning losses triggered by global trade tensions. The Sensex recovered over 500 points from the day’s low, while the Nifty closed above the 24,750 mark, supported by hopes of renewed U.S.-India trade talks, global cues, and a rebound in the rupee.
The Sensex ended 296.28 points lower at 81,185.58, after falling nearly 787 points to 80,695.15 in early trade. The Nifty 50 slipped 86.70 points, closing at 24,768.35, but well off its intraday lows.
Among top gainers were Hindustan Unilever, Jio Financial Services, ETERNAL, Kotak Mahindra Bank, and JSW Steel, rising as much as 4% intraday.
Top 5 Reasons Behind Market Recovery
1. Trade Negotiation Hopes with the U.S.
Investor sentiment improved after former U.S. President Donald Trump’s 25% tariff announcement on Indian goods was widely interpreted as a negotiation tactic rather than a concrete policy. Analysts believe that ongoing trade dialogue between India and the U.S. could soften the proposed tariffs, with key talks scheduled for mid-August.
“Investors will reassess their strategies with a mix of caution and optimism after the tariffs and penalties imposed on Indian goods,” said Utsav Verma, Head of Research at Choice Institutional Equities.
2. Drop in Crude Oil Prices
Brent crude prices slipped 0.19% to $73.10 per barrel, offering relief to India, which imports over 85% of its crude needs. Lower oil prices help ease inflation, support the rupee, and improve current account balances.
3. Positive Global Market Sentiment
Global cues turned positive with Japan’s Nikkei 225 gaining 1.5%, and U.S. equity futures showing strength during Indian trading hours. This lifted investor morale and hinted at resilient global risk appetite.
4. Rupee Bounces Back
After dropping as much as 89 paise, the rupee recovered 14 paise to close at 87.66 against the U.S. dollar. Hopes of RBI intervention and improving trade sentiment contributed to the recovery. Earlier panic had stemmed from concerns over new U.S. tariffs and sanctions related to Russian oil and defence imports.
5. U.S. Fed Hints at Rate Cut
While the Federal Reserve kept interest rates unchanged, statements from Fed officials hinted at internal division, with some advocating a rate cut as early as September. Loose monetary policy in the U.S. typically supports emerging markets like India, making Indian equities more attractive to global investors.
Market Outlook
Despite the modest closing losses, Thursday’s recovery reflects underlying market resilience. Traders are now eyeing developments in U.S.-India trade negotiations, crude price trends, and the Reserve Bank of India’s potential actions in the currency market.
For more live updates on Sensex, Nifty, and market trends, follow Mtimes.co.in – India’s trusted financial news platform.
Disclaimer:
The information provided in this blog is for educational and informational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any financial instruments. Stock market investments are subject to market risks. Past performance is not indicative of future results. Readers are advised to consult a qualified financial advisor before making any investment decisions. The author and publisher are not liable for any losses or damages arising from the use of this information.
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