Market sentiment improved significantly as the Indian rupee strengthened and oil prices declined following eased geopolitical tensions. The currency and commodity movements came after Trump stepped back from aggressive trade rhetoric, providing relief to global markets and reducing immediate concerns about potential trade conflicts.

Currency and Commodity Markets Show Relief

The rupee demonstrated notable strength in early Friday trading, gaining 17 paise to reach 91.41 against the US dollar. This improvement reflected enhanced investor confidence as Trump softened his stance on tariff threats against Europe, particularly those linked to Greenland disputes.

Oil markets experienced significant downward pressure, with prices sliding approximately 2% to reach one-week lows. The decline followed Trump's moderated approach toward both Greenland and Iran, alongside positive developments that could potentially lead to resolution of the Russia-Ukraine conflict.

Corporate Performance and Market Movements

APL Apollo Tubes shares continued their strong performance, trading with gains exceeding 3% for the second consecutive day. The stock had surged over 5% on Thursday following quarterly results announcement, effectively breaking a three-day losing streak. This momentum has resulted in a 7% increase for January, marking the company's best year-start performance since 2018.

Technology Sector Developments

The technology sector witnessed mixed developments, with both expansion plans and cost-cutting measures making headlines. Amazon announced plans for a second wave of layoffs within three months, targeting thousands of employees as part of a broader culture reset initiative. According to employee discussions, the layoffs could be announced on January 27 or 28, with some Polish employees already affected this week.

Conversely, SpaceX continues advancing its cost-reduction initiatives in space technology. Elon Musk indicated that satellite launch costs could decrease dramatically as the company works toward making Falcon 9 rockets fully reusable. Historical data shows launch costs to low-Earth orbit have already fallen from $65,000 per kilogram to $1,500 per kilogram by 2021, with potential for 100-fold further reductions.

Space Industry Milestones

Blue Origin achieved another significant milestone by successfully completing its 38th New Shepard flight, sending six passengers to the edge of space. This marked the first spaceflight of 2026 for the aerospace company founded by Jeff Bezos, continuing the commercial space tourism sector's expansion.

Government and Policy Updates

The Indian government announced details for the upcoming Census 2027, specifying 33 questions citizens must answer during the first phase beginning April 1. The houselisting and housing enumeration phase will occur over a 30-day period between April 1 and September 30, with specific timing determined by individual states and Union Territories.

Looking ahead to Budget 2026, industry experts from gold, jewellery, gems and mining sectors are advocating for policy continuity and tax rationalization measures. Key recommendations include revival of gold bonds, digital incentives, and GST relief for the jewellery sector to unlock household savings and strengthen export performance.

The Indian rupee staged a modest recovery on Thursday, breaking its six-day losing streak amid improved global risk sentiment. The currency closed at 91.63 per dollar, recovering from Wednesday's record low of 91.7425, though it struggled to sustain gains above the key 91.50 level.

Trump's Tariff Retreat Boosts Market Sentiment

The rupee's recovery was primarily driven by relief in global markets after Trump announced at the World Economic Forum in Davos that the U.S. would not proceed with tariffs on Europe that were scheduled to take effect from February 1. This announcement eased fears of a broader U.S.-Europe trade dispute and provided support to emerging market currencies.

"Trump's latest remarks eased fears of a broader U.S.-Europe trade dispute, offering some relief to emerging market currencies, including the rupee," said Dipti Chitale, CEO at Mecklai Financial Services.

Currency Performance and Trading Patterns

Traders observed that the rupee's movement followed the typical pattern seen in recent days, where recoveries struggle to hold momentum. The currency opened higher against the dollar but gave up some gains after failing to break past the 91.50 resistance level.

Ongoing Challenges Weigh on Outlook

Despite the temporary relief, several factors continue to pressure the rupee. Chitale highlighted that delays in a U.S.-India trade agreement are hurting exports that face a steep 50% tariff, while steady dollar demand from importers weighs on market sentiment.

Foreign Investment Outflows Continue

Capital flows remain a significant concern for the rupee's performance. Foreign investors have withdrawn nearly ₹3 billion from Indian equities so far this month, following ₹18 billion of outflows in the previous year. Market participants expect dollar demand and capital flows to continue dominating currency movements in the near term.

Global Market Response

The positive sentiment extended beyond currency markets, with U.S. equities and Treasuries rallying following Trump's announcement. Asian currencies broadly benefited from the reduced trade tension fears, as markets ruled out an immediate escalation in U.S.-Europe trade disputes.