Benchmark indices rebounded in the last hour of Thursday’s session after almost a percentage point drop in the initial stages on hopes that US President Donald Trump will soften his stand on the total tariff of 50% imposed on India. With Trump expected to meet the Russian and Ukraine President for peace talks, there are hopes that things will improve.
In addition, domestic institutional investors (DIIs) provided crucial support, buying shares worth ₹10,864.04 crore, while foreign portfolio investors (FPIs) sold shares worth ₹4,997.19 crore, according to provisional BSE data.
Arun Kejriwal, Founder of Kejriwal Research and Investment Services, noted, “There was institutional support in the market today, given the sensitivity of the event. A lot is expected to unfold in the next ten days, so volatility will remain elevated.”
The Sensex dropped 732.70 points or 0.91% to hit an intraday low of 79,811.29 in early trade. However, it recovered sharply in the latter half, rising 811.97 points or 1.02%. The Sensex ended the day at 80,623.26, up 79.27 points or 0.10%, snapping a two-day losing streak. The Nifty also recouped all of its intraday losses of 230 points, closing at 24,596.15, up 21.95 points or 0.09%.
Geopolitical Hopes and Institutional Support Drive Optimism
“Domestic equities recovered sharply from intraday lows amid a volatile weekly expiry. While the session began with broad-based selling following steep US tariff hikes on India, sentiment improved toward the close as reports emerged of potential peace talks involving US, Russia and Ukraine, raising hopes of a softer US stance on trade,” said Vinod Nair, Head of Research at Geojit Financial Services.
This renewed optimism triggered a strong rebound in the auto, pharma, metals, and energy sectors, helping the market end in positive territory, he added.
Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services, said, “The rebound was driven by news reports indicating a possible meeting between President Trump and President Putin as early as next week, easing geopolitical concerns. Moreover, optimism around a potential India-U.S. trade settlement supported sentiment, especially with a 20-day window still available for negotiations and the U.S. trade delegation scheduled to visit India on August 24.”
Sector Performance and Future Market Outlook
Khemka added that the market is expected to remain range-bound, tracking developments around U.S.-Russia peace talks, India’s response to U.S. tariffs, and the ongoing domestic earnings season.
The overall market breadth was negative, with 2,193 declining stocks versus 1,844 gainers on the BSE. Investor wealth rose marginally by ₹15,678 crore to ₹445.36 lakh crore. Strong recoveries were seen in the metals, services, capital goods, realty, and energy sectors.