The Indian stock markets staged a sharp comeback in today’s session, January 22. Both the domestic indices – Sensex and Nifty moved higher soon after the opening bell with buying picking up soon, tracking positive global cues and easing geopolitical concerns.
In the early trading session, the Sensex surged over 800 points, while the Nifty climbed 1%, crossing the 25,400 mark.
The rally in today’s trading session was broad-based, with buying seen across large-cap, smallcap and midcap stocks. The BSE smallcap and midcap surged over 1.5% in the early trading hours
Let’s take a look at the 4 reason why the markets are rallying today –
Trump’s Davos remarks ease global concerns
US President Donald Trump, speaking at the World Economic Forum in Davos on January 21, said he has put together a basic framework for a possible future agreement on Greenland after discussions with NATO Secretary General Mark Rutte. He added that new tariffs on European countries opposing his Greenland plans are no longer required, indicating a softer approach. Trump also ruled out the use of military force to gain control of the island, helping ease earlier geopolitical concerns.
However, the White House later clarified that the discussions are still at an early stage and no final deal has been reached.
Asian markets positive
Asian stock markets provided a strong lead in early trade, setting the tone for domestic equities. Major indices across the region were trading higher after the recent developments around Greenland.
Broad-Based buying across sectors
The rally was not limited to a few stocks or sectors. Most sectoral indices were trading in the green, with gains seen in automobiles, information technology, metals, pharmaceuticals, media and financial stocks.
Relief rally driven by easing global uncertainty
All these global developments decidedly cut down the uncertainty globally. Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, said uncertainty eased after Trump softened his stance on Greenland and Europe.
“President Trump has withdrawn from his threat to annex Greenland by force and has instead spoken about a framework for a future deal. More importantly, the message that the U.S. would refrain from imposing tariffs on Europe removes the fear of a U.S.-Europe trade war. This relief has triggered short covering, as there are a large number of short positions in the market, making conditions favourable for a bounce,” Vijayakumar added.