After two consecutive sessions of decline, Indian benchmark indices finally snapped their losing streak on Thursday, staging an impressive late-session recovery that restored investor sentiment. The Sensex and Nifty, both of which had slumped by nearly one percent in early trade, ended the day slightly higher, supported by expectations of global diplomatic resolutions and strong institutional support at home.
The early trading hours were marked by sharp declines triggered by concerns around US President Donald Trump's unexpected imposition of a total 50 percent tariff on Indian goods. This move rattled markets across sectors. However, investor worries eased after news reports suggested an upcoming peace meeting between Trump, Russian President Vladimir Putin, and Ukrainian leadership. The diplomatic overture sparked hopes of broader geopolitical de-escalation, and possibly a softer stance from the US on its trade decisions involving India.
Domestic institutional investors played a key role in stabilizing the markets, pumping in over ₹10,864 crore in equity purchases, effectively cushioning the sell-off pressure created by foreign portfolio investors, who offloaded shares worth nearly ₹5,000 crore according to provisional BSE data.
The Sensex, which had plunged by over 730 points in the morning to hit a low of 79,811, bounced back by over 800 points to touch an intraday high before closing at 80,623, a modest gain of 79 points. The Nifty followed a similar trajectory, recovering its 230-point dip to end at 24,596, up nearly 22 points.
Market analysts attributed the recovery to a mix of geopolitical optimism and investor confidence in potential trade resolutions. Arun Kejriwal of Kejriwal Research said that institutional support on a day like this was not only crucial but expected, given the sensitivity of the global events in motion. He also warned that the coming ten days would be crucial, with volatility expected to stay elevated.
Sectoral performance added to the market’s resilience. Auto, pharma, metals, energy, and realty stocks saw a surge in buying interest toward the end of the day. The bounce was also boosted by the weekly expiry, where volatility usually spikes, yet was managed efficiently by positive news flow in the final trading hours.
Vinod Nair of Geojit Financial Services pointed out that while the initial market reaction was dictated by global trade tensions, the mood turned optimistic after reports of diplomatic backchannel talks gained traction. He noted that this optimism was quickly reflected in sector-specific gains that helped turn the broader market sentiment.
Siddhartha Khemka of Motilal Oswal Financial Services further emphasized the importance of the potential meeting between global leaders, calling it a pivotal moment that could influence global trade policies and investor confidence. He also highlighted the upcoming 20-day negotiation window between India and the US as another factor supporting the recovery, especially with a US trade delegation expected to visit India on August 24.
Despite the recovery, the overall market breadth remained negative with more declining stocks than advancing ones on the BSE. Investor wealth showed a modest rise of ₹15,678 crore, bringing total market capitalization to ₹445.36 lakh crore.
As the market braces for a complex mix of global diplomacy, trade talks, and earnings reports from key domestic firms, investors are advised to stay cautious while tracking the next big triggers. Sentiment remains fragile but hopeful, with many eyes now fixed on the outcome of high-stakes geopolitical dialogues.
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