Indian equity markets snapped a five-session losing streak with a dramatic intraday turnaround on January 12, as optimism around US-India trade negotiations triggered a sharp recovery from three-month lows. The session began weakly but reversed course after confirmation of upcoming trade discussions, demonstrating the market's sensitivity to bilateral trade developments.

Market Performance Overview

The benchmark indices posted solid gains after recovering from morning weakness. Key market performance metrics are detailed below:

The Nifty 50 opened at 25,669.05 and slid to an intraday low of 25,473 during morning trade before staging a remarkable recovery. The Nifty Bank recovered approximately 676 points from its intraday low of 58,864.

Trade Talk Catalyst Drives Turnaround

Sentiment reversed sharply after 12:00 PM following remarks by US Ambassador to India Sergio Gor, who confirmed that the next round of trade discussions is scheduled for January 13. According to Nandish Shah, Deputy Vice President at HDFC Securities, "The tide turned sharply after 12:00 PM following optimistic remarks from US Ambassador Sergio Gor. His confirmation that New Delhi and Washington are actively engaged in finalising a trade deal ignited a massive more than 300-point recovery from the day's lows."

Sectoral Performance and Top Movers

Metal stocks led the sectoral rally, with the Nifty Metal Index surging over 2%. The top gainers and losers on the Nifty 50 showed clear sectoral preferences:

Top Gainers:

Top Losers:

In contrast to the metal sector's strength, Realty and Media indices shed over 1%.

Broader Market Weakness and Technical Outlook

Broader markets underperformed the benchmark indices, with the Nifty Midcap 100 closing marginally lower by 0.05% at 59,717.10 and the Nifty Smallcap 100 falling 0.52% to 17,193.30. Market breadth remained weak, with 1,468 stocks advancing against 2,837 declining on the BSE. Notably, 532 stocks hit 52-week lows compared to just 82 touching 52-week highs.

Shrikant Chouhan, Head Equity Research at Kotak Securities, noted that "from the day's lowest point, the market bounced back over 300/1,200 points, which is largely positive." Technical analysts highlighted the formation of a bullish hammer candlestick pattern on the Nifty's daily chart.

Currency and Commodity Movements

The Indian rupee traded flat near 90.16 against the dollar as markets awaited domestic CPI and WPI data. Jateen Trivedi, VP Research Analyst at LKP Securities, stated, "The rupee has support in the 90.45–90.55 zone, with resistance seen near 89.50."

Gold prices surged sharply amid heightened geopolitical tensions. MCX gold gained ₹2,600 to trade near ₹1,41,500, while Comex gold jumped approximately $80 to around $4,590. According to Trivedi, "The rally is being driven by heightened geopolitical risk premiums amid escalating tensions involving the US, Venezuela and now Iran."

Market Outlook

Looking ahead, market participants will focus on earnings from IT majors TCS and HCL Tech on January 13, along with the outcome of US-India trade discussions. Abhinav Tiwari, Research Analyst at Bonanza, emphasized that "The outcome of the tomorrow's trade discussions and upcoming IT company earnings will be key drivers for the market in the near term."

Indian equity markets staged a remarkable recovery on Monday, with both benchmark indices snapping their five-day losing streak following positive developments on the US-India trade front. The turnaround came after early weakness, as investor sentiment improved significantly following announcements about upcoming trade discussions.

Market Performance Overview

The trading session showcased the volatile nature of current market conditions, with indices experiencing significant intraday swings before closing in positive territory.

Both benchmarks had faced considerable pressure earlier in the session, with the Sensex sliding as much as 715 points and the Nifty briefly dipping below the 25,500 level. The dramatic reversal occurred after the incoming US ambassador to India announced that trade discussions between the two countries would begin on January 13.

Top Performers and Sector Movements

The rally was broad-based, with several blue-chip stocks leading the charge. Among the 30-stock Sensex constituents, multiple sectors contributed to the positive momentum.

Financial stocks played a crucial role in underpinning the market rebound, climbing approximately 0.5% after having declined 0.45% earlier in the session. This sector's recovery was particularly significant given its heavy weighting in the benchmark indices.

Reliance Industries demonstrated the day's volatility, recovering to end up 0.5% after reversing a 1.65% intraday drop. The stock had declined 7.4% the previous week following the conglomerate's announcement that it does not expect Russian crude shipments in the current month.

Notable Decliners

Despite the overall positive sentiment, some stocks faced significant pressure due to company-specific developments.

Market Context and Expert Analysis

The Monday recovery came after a challenging period for Indian equities, with both benchmarks having shed approximately 2.5% the previous week in their steepest weekly decline in more than three months. The indices had been down as much as 0.8% earlier in the day, extending the weakness from the prior week.

According to Vinod Nair, Head of Research at Geojit Investments, the market rebound was primarily driven by improved investor sentiment following favorable remarks on trade deals by the US Ambassador ahead of the next round of negotiations. The commodities segment outperformed during the session, supported by strength in metals, which benefited from renewed buying interest amid supply constraints.

Value buying was evident in consumer and banking stocks, as investors sought opportunities after recent corrections, supported by expectations of stronger Q3 earnings and improving demand. Additionally, precious metals maintained their upward momentum amid persistent geopolitical tensions, contributing to the overall market recovery.