Indian Markets Rebound: Sensex, Nifty End Losing Streak on Trade Talk Optimism
Overview
Indian stock markets staged a strong recovery, with the Sensex and Nifty50 ending a five-day losing streak. The rebound was fueled by renewed optimism surrounding India-U.S. trade talks, following positive remarks from the new U.S. ambassador. Coal India and Tata Steel led the gains, while select IT and finance stocks dragged.
Indian equity benchmarks Sensex and Nifty50 snapped a five-day losing streak, surging in late trading Tuesday. The recovery was driven by renewed optimism stemming from improved India-U.S. trade talks. The Sensex closed up 301.93 points at 83,878.17, while the Nifty50 gained 106.95 points to end at 25,790.25.
Earlier in the session, both benchmarks had been under significant pressure. The Sensex dropped as much as 715 points, and the Nifty briefly dipped below the 25,500-mark, reflecting investor nervousness.
Trade Talk Catalyst
Market sentiment shifted notably following supportive global cues. Remarks from the new U.S. ambassador to New Delhi, Sergio Gor, signaled continued bilateral engagement, with fresh discussions slated for January 13. This provided a crucial upward catalyst.
Top Performers and Laggards
Coal India emerged as the session's top gainer, advancing approximately 3.40%. Tata Steel and Asian Paints also saw significant boosts, climbing between 2.50% and 2.75%. Hindalco and JSW Steel followed, each rising around 2.20%. Trent, which had fallen sharply earlier, rebounded to close 1.24% higher.
Conversely, Infosys, Tata Motors Passenger Vehicles, and Bajaj Finance acted as laggards, each shedding about 1% and dragging down the indices.
Sectoral Performance
The metal sector index was a standout performer, rallying over 2%. The PSU Bank and FMCG indices registered modest gains of 0.7% and 0.6%, respectively. Other sectors, including capital goods, pharmaceuticals, media, and real estate, experienced declines ranging from 0.5% to 1.5%.
Analysts noted the sharp recovery from intraday lows as a positive sign. Shrikant Chouhan, Head of Equity Research at Kotak Securities, described the bounce back of over 300 points on the Sensex and 1,200 points on the Nifty from their lowest points as "largely positive."
A note from Bajaj Broking Research highlighted continued demand for safe-haven assets amid geopolitical tensions, which supported precious metals. The commodities space, particularly metals, outperformed due to firm prices and supply constraints.
