Market rebound: Why did Sensex rise 700 pts from the day’s low and Nifty above 25,700?

Synopsis: The Sensex and Nifty surged on investor optimism after US Ambassador Sergio Gor highlighted deepening US-India ties, upcoming trade talks, and India joining the US-led Pax Silica initiative on AI and supply chain security.

The Indian stock market has experienced a significant fall today and then later recovered, with both the Nifty 50 and Sensex showing a pullback. Investors and traders are closely watching the evolving global and domestic market conditions as they try to understand the reasons behind this Sudden market rebound.

In today’s session, both indices opened with a slight gap down/ almost flat, reflecting negative views from the start. As trading continued, buying pressure increased, causing a sudden rise in the indices. Then, as the session continued, both Sensex and Nifty have recovered and have been currently trading in green.

Index Overview  

The equity benchmark indices extended their losses for the last five days, as a combination of factors weighed on investor sentiment, and currently, in Monday’s session, it is trading in green (Bullish).

The Nifty Index opened at 25,669.05 and dipped to a low of 25,473.40 during the session, before recovering strongly to more than 200 points from the low. It is now trading above the day’s opening level.

Meanwhile, the Sensex Index opened at 83,435.31 and dipped to a low of 82,861.07 during the session, before recovering strongly to rise more than 700 points from the low, and it is now trading above the day’s opening level.

Reasons for the Sudden Rise

The sudden rise in the Sensex and Nifty was driven by renewed investor optimism following comments by US Ambassador to India Sergio Gor on ongoing trade talks.  Sergio Gor, the newly appointed US Ambassador to India, emphasized that India is the United States’ most important ally, highlighting the deepening ties between the two nations. 

He announced that the next round of US-India trade talks is scheduled for tomorrow and revealed that India will join the US-led initiative, Pax Silica, a flagship effort of the US Department of State focused on AI and supply chain security. The announcement has positively impacted shares of critical mineral companies like GMDC and NALCO, reflecting investor optimism.

Pax Silica aims to strengthen economic security among allied and trusted partners. Despite this, Indian equities have had a weak start to the year, with the Nifty 50 index dropping in the first eight trading sessions, and 30 of its 50 constituents showing negative returns.

Gor conveyed President Trump’s best wishes to India and Prime Minister Narendra Modi, noting that Trump may visit India in the next year or two. He also stressed that while trade is an important part of the US-India relationship, cooperation will continue across multiple sectors, including security, counter terrorism, energy, technology, education, and health. 

The market rebounded, aided by value buying, after five straight days of decline. The recent downturn had been driven by profit-taking, foreign fund outflows, worries over potential US tariffs on Indian exports, and geopolitical uncertainties.

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