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Sensex Soars 568 Points as Trump Eases Greenland Trade War Fears

Indian equity benchmarks surged in early trade, with the Sensex jumping 568 points, after US President Donald Trump walked back tariff threats against European nations over Greenland. The de-escalation of trade war fears triggered a broad-based rally, with midcap and smallcap indices outperforming. Analysts note the market construct is ripe for a significant short-covering rally following the geopolitical relief. While Asian markets were mixed, the positive momentum followed gains on Wall Street in the previous session.

Key Points: Sensex, Nifty Rally on Eased US-Europe Tariff Tensions

  • Sensex gains 568 points
  • All sectoral indices trade in green
  • Trump retracts EU tariff threats
  • Market poised for short-covering rally
2 min read

Sensex, Nifty post strong gains as geopolitical tensions ease over Greenland

Indian stock markets surge as President Trump retracts tariff threats over Greenland, sparking a broad-based relief rally across sectors.

"formed the framework of a future deal with respect to Greenland - Donald Trump"

Mumbai, Jan 22

The Indian benchmark indices posted strong gains in early trade on Thursday, after US President Donald Trump walked back on his tariff threats against eight European countries over Greenland ownership.

As of 9.25 am, the Sensex added 568 points, or 0.69 per cent to reach 82,477 and the Nifty advanced 160 points, or 0.64 per cent to 25,317.

Main broadcap indices overperformed the benchmark indices, with the Nifty Midcap 100 adding 0.94 per cent, and the Nifty Smallcap 100 advancing 1.01 per cent.

All sectoral indices were trading in the green, with Nifty auto, PSU bank, media and IT being the notable gainers - up 1.05 per cent, 0.89 per cent, 1 per cent and 0.80 per cent, respectively.

Immediate support lies at 25,000 zone, while resistance is now anchored near 25,250-25,300 zone, market watchers said.

Asia-Pacific markets rebounded after Trump informed that tariffs won't be imposed on European countries over Greenland.

At the World Economic Forum (WEF) in Davos, Trump said that force would not be used to acquire the Arctic island, adding that he had "formed the framework of a future deal with respect to Greenland," with NATO Secretary General Mark Rutte.

Analysts said that Trump's message that the US would "refrain from imposing tariffs on Europe" retracts threat of a US-Europe trade war which was dragging the markets down.

The consequent relief rally in the market could be significant since two lakh short contracts are lying in the market, with the market construct appropriate for a short-covering, they said.

Though the Q3 profitability of companies was negatively impacted by higher provision for the new labour code commitments, the market will shrug it off as a one time factor, an analyst added.

In Asian markets, China's Shanghai index lost 0.12 per cent, and Shenzhen eased 0.12 per cent, Japan's Nikkei added 1.87 per cent, while Hong Kong's Hang Seng Index dropped 0.08 per cent. South Korea's Kospi added 1.97 per cent.

The US markets ended in the green in the last trading session as Nasdaq advanced 1.18 per cent. The S&P 500 gained 1.16 per cent, and the Dow added 1.21 per cent.

On January 20, foreign institutional investors (FIIs) in India sold net equities worth Rs 1,788 crore, while domestic institutional investors (DIIs) were net buyers of equities worth Rs 4,520 crore.

- IANS

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Reader Comments

P
Priya S
Finally some good news! My mutual fund SIPs were looking a bit worried last week. Hope this rally sustains and isn't just a one-day wonder. The smallcap surge is particularly encouraging for retail investors like me.
R
Rohit P
Trump's tariff threats cause volatility, then he walks them back and markets surge. It feels like the world markets are just a yo-yo in his hands. Our regulators need to insulate us better from such external shocks.
S
Sarah B
Interesting to see the auto and IT sectors leading. As someone working in tech, a stable global trade environment is crucial for our exports and project pipelines. This is a relief for the sector's outlook.
V
Vikram M
The article mentions DIIs were net buyers even when FIIs sold. This is the real story! Growing domestic investor confidence is what will make our markets truly strong and less vulnerable to foreign fund whims. 🚀
K
Karthik V
While the short-term rally is nice, let's not forget the "higher provision for the new labour code" impacting Q3 profits. That's a real cost for Indian companies. Hope the government provides clarity soon to remove this overhang.

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