US President Donald Trump's decision to withdraw his proposed tariff threat on European allies has provided relief to global markets, while Indian equities snapped a three-day losing streak with strong buying interest across sectors. The development comes amid active corporate earnings season and significant business announcements from the World Economic Forum in Davos.

Global Markets Rally on Tariff Withdrawal

Trump announced on Truth Social that he will not proceed with the 10% additional tariff on European allies that was scheduled to take effect from February 1. The announcement sparked what traders described as another "TACO" trade, leading to a rebound on Wall Street. The withdrawal of the tariff threat provided immediate relief to global markets that had been concerned about potential trade disruptions.

Indian Markets Snap Losing Streak

Indian benchmark indices responded positively to the global cues, with both BSE Sensex and NSE Nifty closing higher on Thursday, January 22. The Sensex rose 398 points, closing above key levels, while the Nifty settled above 25,250. Broader markets outperformed frontline indices, with market breadth remaining firmly in favor of advances across sectors and stocks.

IndiGo Reports Sharp Profit Decline

InterGlobe Aviation, which operates IndiGo, reported disappointing Q3 results with net profit declining significantly due to exceptional costs. The airline's financial performance showed mixed signals despite operational improvements.

The sharp decline in profitability was attributed to exceptional costs, even as the airline managed to grow its revenue by 7% year-on-year.

Corporate and IPO Developments

PhonePe has filed its Updated Draft Red Herring Prospectus (UDRHP) with SEBI, moving closer to its initial public offering. The Walmart-backed fintech major's IPO filing indicates strong investor interest in the digital payments sector. As part of the offering, existing investors Microsoft and Tiger Global are expected to pare their stakes through an Offer for Sale (OFS).

Meanwhile, Air India is reportedly set to face a record annual loss of $1.60 billion, attributed to the impact of last year's deadly crash and airspace shutdowns that disrupted the airline's turnaround efforts.

Davos Highlights: Trade and Technology Focus

From the World Economic Forum in Davos, Trump expressed confidence about India-US trade relations, praising Prime Minister Narendra Modi and indicating that a bilateral trade pact remains on the agenda. Industry leaders used the platform to highlight sectoral challenges and opportunities:

• Telecom Sector: Sunil Bharti Mittal warned that ₹200.00 pricing levels are unsustainable and called for urgent tariff repair in India's telecom sector
• Technology Focus: Honeywell's CEO outlined the company's strategy to double down on automation, data, and physical AI as core growth pillars
• State Development: Maharashtra Chief Minister Devendra Fadnavis positioned innovation and artificial intelligence at the center of the state's trillion-dollar economy ambitions

The convergence of positive global cues, domestic market resilience, and active corporate developments suggests continued investor attention on both policy announcements and earnings performance in the coming sessions.

Trump has reiterated his desire for $1.5 trillion in annual US defense spending, reaffirming his commitment to substantial military budget expansion. This restatement of his defense spending objectives highlights the continued emphasis on strengthening military capabilities and defense infrastructure.

Defense Spending Target

The reiterated $1.5 trillion annual defense spending target represents a significant commitment to military investment. This figure underscores the priority being placed on defense capabilities and military readiness.

Implications for Defense Sector

The reaffirmation of this substantial defense spending goal signals potential opportunities for defense contractors and military equipment manufacturers. Such spending levels would represent a significant allocation of federal resources toward defense and military operations.

The reiterated commitment to this spending target demonstrates the continued prioritization of defense investment as a key policy objective. This level of defense spending would have far-reaching implications for military procurement, research and development, and overall defense sector activity.