Indian stocks, rupee rebound as Trump remarks ease concerns over tariffs on Europe

Mumbai: Indian stocks and the rupee rebounded on Thursday after Donald Trump backed away from his threats to impose tariffs on Europe over Greenland. The US President’s remarks in Davos that he had no intention to use force to acquire Greenland eased risk-off sentiment, sparking a sell-off in safe-haven assets such as gold and silver.

Snapping a three-day losing streak, the NSE Nifty ended at 25,289.90, up 132.40 points or 0.5%, while the BSE Sensex closed 397.74 points, or 0.5%, higher at 82,307.37. Both indices are still 1.6% lower so far this week.

Overnight, the Dow Jones Industrial Average, Nasdaq Composite and the S&P 500 rose 1.2% each. In Asia on Thursday, Japan gained 1.7% and Taiwan climbed 1.6%. South Korea advanced 0.9%, while Hong Kong and China edged 0.2% and 0.1% higher.

Volatility Persists
Analysts said the bounce was driven by the liquidation of bearish bets.

“The market was at highly oversold levels, and the data was implying an extremely bearish setup until Wednesday, but Trump’s comments on reaching an agreement with NATO over Greenland led to a short squeeze,” said Rajesh Palviya, head of technical and derivatives, Axis Securities.

While short covering lifted indices on Thursday, markets “are not out of the woods yet,” he warned. The Indian rupee recovered mildly on Thursday, ending its six-day losing streak to close at 91.63 to the dollar, higher than its record-low close of 91.70 on Wednesday. The moderate strength comes from an improvement in risk appetite after Trump stepped back from the tariff brink. The rupee traded between 91.68 and 91.46, but fell back soon enough, traders said. Among precious metals, gold and silver prices softened as geopolitical anxiety eased and global risk appetite improved. Gold inched marginally higher and silver rose 0.6%.

FPI sell-off
At home, foreign portfolio investors (FPIs) sold shares worth a net Rs 2,549.80 crore on Thursday. Their domestic counterparts bought shares worth Rs 4,223 crore. In January, global investors sold stocks worth Rs 30,376 crore.

Analysts said market sentiment remains fragile as global news flow continues to drive trading patterns, with uncertainty over Trump’s shifting positions adding to the volatility.