Investor sentiment also drew support after Trump said at the World Economic Forum in Davos that the US would strike a “good deal” with India, raising hopes of progress on bilateral trade talks.
The Sensex surged as much as 874 points, or 1.1 per cent, in early trade before paring gains amid profit-booking. It eventually closed 398 points, or 0.5 per cent, higher at 82,307. The Nifty 50 ended the session at 25,290, up 132 points, or 0.5 per cent.
Apart from signalling a climbdown on tariffs, Trump also ruled out the use of force to seize Greenland. His remarks followed discussions with Nato Secretary-General Mark Rutte, with both sides agreeing on a “framework” for a future deal involving Greenland and the Arctic region.
The recent US-Europe stand-off over Greenland had added to pressure on Indian equities, already weighed down by tepid corporate earnings and the lack of visible progress on India-US trade negotiations.
Over the past 12 trading sessions, the Sensex and Nifty had posted gains on just two occasions.
“Going ahead, the 25,400-25,450 zone is likely to act as an immediate resistance, where selling pressure could emerge at higher levels. A decisive and sustained breakout above 25,450 would be crucial, as it may pave the way for an extension of the ongoing pullback rally towards the 25,600 mark in the near term. On the downside, the 200-day EMA, placed in the 25,170-25,150 zone, is expected to provide strong support,” said Sudeep Shah, head of technical and derivatives research at SBI Securities.
Market breadth remained strong, with 2,934 stocks advancing and 1,307 declining on the BSE.
Four-fifths of Sensex constituents ended higher, with State Bank of India, which rose 2 per cent, emerging as the biggest contributor to the index’s gains.
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