Sensex and Nifty climb sharply as Greenland tensions ease

Indian equity benchmarks opened sharply higher on Thursday, buoyed by improving global sentiment after US President Donald Trump stepped back from his threat to impose tariffs on European countries over Greenland, easing geopolitical and trade concerns.

In early trade, the Sensex rose by 568 points, or 0.69 per cent, to 82,477, while the Nifty gained 160 points, or 0.64 per cent, to trade at 25,317.

Broader markets outperformed the frontline indices, with the Nifty Midcap 100 advancing 0.94 per cent and the Nifty Smallcap 100 climbing 1.01 per cent, reflecting strong risk appetite among investors.

All sectoral indices were trading in positive territory. Auto, PSU banking, media and IT stocks led the gains, rising by 1.05 per cent, 0.89 per cent, 1 per cent and 0.80 per cent respectively.

Market participants said immediate support for the Nifty was seen around the 25,000 mark, while resistance was now placed in the 25,250–25,300 range.

Asian markets also firmed after Trump indicated that tariffs would not be imposed on European countries in connection with the Greenland dispute. Speaking at the World Economic Forum in Davos, the US president said force would not be used to acquire the Arctic island and that he had outlined a “framework” for a future arrangement with Nato Secretary-General Mark Rutte.

Analysts said Trump’s assurance that the US would refrain from imposing tariffs on Europe reduced fears of a transatlantic trade war, which had been weighing on markets in recent sessions.

They added that the resulting relief rally could gather momentum, given the presence of a large number of short positions in the market, creating scope for short-covering.

While some analysts noted that corporate profitability in the third quarter had been affected by higher provisions linked to new labour code obligations, they said the market was likely to treat this as a one-off issue.

Elsewhere in Asia, Japan’s Nikkei surged 1.87 per cent and South Korea’s Kospi jumped 1.97 per cent. China’s Shanghai and Shenzhen indices slipped 0.12 per cent each, while Hong Kong’s Hang Seng Index edged down 0.08 per cent.

Overnight, US markets closed firmly higher. The Nasdaq rose 1.18 per cent, the S&P 500 gained 1.16 per cent and the Dow Jones Industrial Average advanced 1.21 per cent.

In the Indian institutional space, foreign institutional investors sold equities worth Rs 1,788 crore on 20 January, while domestic institutional investors were net buyers to the tune of Rs 4,520 crore, providing support to the market.

With IANS inputs