Indian equity markets are expected to begin Thursday’s session on a stronger footing, supported by encouraging global cues and a visible easing of concerns related to trade tensions and geopolitical uncertainty. Early indicators suggest a rebound at the opening bell, offering some relief after domestic equities endured three consecutive sessions of declines.
GIFT Nifty futures were trading at around 25,338 at approximately 8:09 am, signalling a positive start for the NSE Nifty 50, which had ended Wednesday’s session at 25,157.50. This gap between futures and the previous close points to optimism among traders ahead of the opening.
Domestic markets have been under sustained pressure in recent days, with both the Sensex and the Nifty hovering near three-month lows. Over the past three sessions, the benchmark indices have declined by roughly 2 per cent each, reflecting persistent nervousness among investors.
The recent slide has been driven by a combination of factors, including earlier remarks by US President Donald Trump on Greenland, fears of a potential trade confrontation with the European Union, continued selling by foreign institutional investors, and disappointing corporate earnings. As a result, the benchmarks are now trading nearly 5 per cent below their all-time highs.
Sentiment improved overnight after developments in global markets helped calm investor anxieties. US President Donald Trump ruled out the use of military force to gain control over Greenland and also stepped back from earlier indications of imposing fresh tariffs on European allies. These comments reduced fears of an escalation into a broader trade conflict and provided a boost to global equities.
Asian markets reacted positively, rising by around 1 per cent as they followed gains on Wall Street. Investor confidence improved after Trump indicated he was open to a possible deal to resolve the dispute linked to the Danish territory, comments he made during the World Economic Forum in Davos. These signals helped soothe market nerves that had been rattled earlier in the week.
While equities advanced, gold prices eased slightly after touching a record high in the previous session. The pullback in gold reflected a shift away from safe-haven assets as investors’ appetite for risk improved amid better global cues.
There were also supportive signals on the trade front involving India. A report quoted Trump as saying that the United States was “going to have a good deal with India,” raising expectations of progress toward a bilateral trade agreement. This development added to the positive sentiment surrounding Indian markets.
In parallel, India is also moving closer to a trade agreement with the European Union, a deal that could potentially result in the world’s largest free-trade zone. Separately, the EU has agreed to move forward with signing a new security and defence partnership with India, an update shared by EU Foreign Policy Chief Kaja Kallas on Wednesday.
Market participants believe that the near-term outlook could see some improvement. Vinod Nair, Head of Research at Geojit Investments Limited, said that the ongoing earnings season may present selective buying opportunities and that the next session is expected to be more constructive, supported by resilient domestic demand.
Despite the improved outlook, foreign investor activity remains a key area of concern. Foreign institutional investors have sold Indian equities worth Rs 34,041.21 crore so far in January, underscoring sustained outflows. On January 21 alone, net foreign selling amounted to Rs 1,787.66 crore.
Overall, while structural challenges and selling pressure from overseas investors persist, the combination of positive global signals, easing trade-related worries and improving risk appetite suggests that Indian equity markets could open Thursday’s session on a firmer and more optimistic note.
