Indian equity markets staged a dramatic intraday comeback on Monday, snapping a nervy start as fresh signals from Washington soothed trade worries.
The Sensex, which was down over 700 points in early trade, erased all losses within an hour and ended the session up 302 points at 83,878.
The Nifty 50 reclaimed the 25,500 mark, closing 107 points higher at 25,790.
So, what changed?
The turnaround came after newly appointed US Ambassador to India Sergio Gor struck a conciliatory tone on India–US trade ties, easing fears triggered by tariff threats and weeks of relentless selling.
Calling the relationship a “genuine friendship,” Gor said real friends can disagree and resolve differences. He confirmed that India and the US are actively engaged in trade talks, with the next round expected as early as January 13.
That reassurance flipped market sentiment decisively.
Adding further momentum was Gor’s announcement that India will be invited to join PaxSilica, a US-led strategic initiative focused on building a secure global silicon and semiconductor supply chain — spanning critical minerals, semiconductors, AI, and advanced manufacturing.
Markets took that as a strong geopolitical and strategic positive. The rally was broad-based.
Bank Nifty jumped over 1% from the day’s low, midcaps and smallcaps pared losses, and export-oriented stocks rebounded sharply, after earlier fears of tariffs as high as 500%.
Today’s bounce also had support from value buying, after markets fell for five straight sessions last week, with the Sensex down over 2,100 points and sentiment extremely fragile.
Monday’s sharp reversal shows just how headline-sensitive markets remain and how quickly confidence can return when trade risks ease.
That’s ET Market Watch for today.
