India’s domestic equity markets finally caught their breath on Thursday, snapping a prolonged losing streak with a strong rebound that lifted investor sentiment after weeks of persistent selling pressure. The S&P BSE Sensex surged by 789.57 points to close at 82,699.20, while the NSE Nifty50 climbed 252.95 points to settle at 25,410.45, marking one of the sharpest single-day recoveries in recent weeks.
Market participants who entered the session bracing for yet another lacklustre or negative day were instead met with an unexpected turnaround. What had felt like an unrelenting slide suddenly gave way to a broad-based rally, catching many traders off guard and forcing a reassessment of near-term expectations.
The trigger for the bounce came from global developments rather than domestic cues. US President Donald Trump unexpectedly dialled down rhetoric on two fronts that had been weighing heavily on global risk appetite. He stepped back from earlier suggestions of using force over Greenland and also appeared to soften his stance on imposing fresh tariffs on Europe, easing fears of a wider geopolitical and trade escalation.
This shift in tone provided immediate relief to global markets, which had been rattled by uncertainty and policy unpredictability. Indian equities mirrored that relief, as the reduction in global risk aversion encouraged investors to re-enter positions that had been aggressively sold down in recent weeks.
With uncertainty easing, buying interest returned across sectors. Market analysts noted that stocks had slipped into deeply oversold territory and were primed for a technical rebound, needing only a modest catalyst to reverse course. The easing of geopolitical tensions proved sufficient to spark that move.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, described the development as another example of a sudden policy reversal from Washington. He said Trump’s retreat from the threat of forcibly annexing Greenland, along with indications that the US would avoid fresh tariffs on Europe, removed the looming risk of a transatlantic trade conflict that had been dragging markets lower. He added that the conditions were ripe for a relief rally, pointing to the presence of nearly two lakh short contracts in the market, which created the perfect setup for short covering.
Brokerage reports echoed this assessment, with several analysts highlighting that the sharp correction seen over the past week had pushed valuations into attractive territory. Such levels, they noted, often draw bargain hunters back into the market, particularly when external pressures begin to ease.
There were also tentative signs of relief on the flows front. Some analysts observed that foreign institutional investor selling appeared to be slowing, a small but meaningful shift for a market that had been struggling to find a firm support base amid sustained outflows.
On the domestic earnings front, the picture remains mixed. Third-quarter results have been impacted by higher provisions linked to the implementation of the new labour code, which analysts largely view as a one-off adjustment rather than a structural concern. While this has weighed on some balance sheets, it has not fundamentally altered longer-term growth expectations.
There were also pockets of positive domestic news. Eternal delivered stronger-than-expected revenue and profit growth in its quick commerce segment, offering Dalal Street a rare homegrown boost at a time when sentiment has been dominated by global cues.
Whether this rebound marks the definitive end of the recent downturn remains uncertain. It is still premature to declare that the worst is behind the market. However, Thursday’s sharp recovery suggests that recent losses were driven more by fear and uncertainty than by a collapse in underlying fundamentals. If global conditions remain stable and corporate earnings avoid unpleasant surprises, this move could signal the beginning of a more measured and resilient phase for Indian equities.
