Sensex Falls 675 Points From Day’s High, Nifty Slips Below 25,250

After falling for three days, the domestic equity market on Thursday started the session on a strong note amid positive global cues, with both the BSE Sensex and the NSE Nifty trading over 1% in the initial trade. However, the rally came under pressure after sometime and the Sensex has shed nearly 675 points and Nifty slipped below 25,250.

In the opening trade, the BSE Sensex traded nearly 813 points higher to trade at 82,722.49 and the NSE Nifty rose above 25,400 to trade nearly 256 points higher at 25,402.23. However, at 11:20 am, the Sensex fell nearly 675 points from the day’s high of 82,783 to trade at 82,110.

The Nifty fell below 25,250 points.

Why Market Rose Today?

The rally comes after a rebound in global equities after US President Donald Trump ruled out the use of force to seize Greenland and dropped plans for new tariffs on European allies, easing market jitters.

All 16 major sectors logged gains. The broader small-caps and mid-caps rose about 1% each.

Other Asian markets rose 1%, tracking an uptick in Wall Street equities overnight.

While global equities rose, safe-haven gold eased after scaling a record peak in the previous session.

Responding to a question by Moneycontrol, Trump said that the US is “going to have a good deal (with India)”, signalling optimism on a bilateral trade agreement.

Both Nifty and Sensex had lost 2% each in the previous three sessions, on tensions over Trump’s earlier threats to acquire Greenland and reignite a trade war with the EU, and amid relentless foreign selling and tepid corporate earnings.

V K Vijayakumar, chief investment strategist at Geojit Investments Limited, said, “In yet another classic TACO ( Trump Again Chickens Out) President Trump has withdrawn from his threat to ‘annex Greenland by force, if necessary’.”

Instead, in Davos yesterday Trump said “we have reached a framework of a future deal on Greenland”. More importantly, the message that the US would “refrain from imposing tariffs on Europe” takes away the threat of a US-Europe trade war which was dragging the markets down. The consequent relief rally in the market today can be significant since there are about 2 lakh short contracts in the market and the market construct is right for short-covering.”

The Q3 profitability of companies have been affected by higher provision for the new labour code commitments. But the market will shrug it off since this is a one time commitment. Among results announced yesterday Eternal stands out with better-than-expected revenue and profit growth from quick commerce business, Vijayakumar added.