Sensex Up Over 850 Points From Day's Low, Nifty Above 24,800: Key Reasons Behind Market Recovery
Indian equity markets bounced back sharply from early losses on Thursday, lifted by cooling crude oil prices, firm global cues, and optimism around ongoing trade negotiations between India and the United States.
The Sensex, which had tumbled 786 points or 0.96% in morning trade to hit a low of 80,695.15, rebounded nearly 650 points to reach an intraday high of 81,345.69. The Nifty also staged a strong comeback from its low of 24,635, rising above the 24,800 mark to trade at 24,822.40.
1. Trade Negotiation Optimism
Investor sentiment improved after US President Donald Trump, while proposing a 25% tariff on Indian goods, affirmed that talks with India would continue. Market analysts view the move as a strategic negotiation tactic, with the actual tariffs likely to be lower. Cautious optimism prevails ahead of the next round of trade talks scheduled for mid-August.
2. Crude Oil Eases
Brent crude slipped 0.19% to USD 73.10 per barrel, offering relief to Indian markets. As a major oil importer, India benefits from lower crude prices, which help rein in inflation and ease pressure on the current account.
Asian markets traded mostly higher, with Japan's Nikkei 225 gaining nearly 1.5%. Meanwhile, US equity futures were in the green during Indian market hours, suggesting a firm start on Wall Street later in the day.
4. Rupee Recovery
The Indian rupee recovered 14 paise from its all-time low to trade at 87.66 against the US dollar, following suspected RBI intervention. This rebound came after a steep 89-paise fall the previous day—its sharpest one-day drop in over three years—amid concerns over US sanctions linked to Russian oil and defence imports.
5. Rate Cut Hopes in the US
The US Federal Reserve kept interest rates unchanged in its latest meeting. However, internal dissent—most notably from Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller—signalled rising support for a rate cut. Although Fed Chair Jerome Powell avoided giving a timeline, market participants interpreted the tone as leaving room for a potential rate cut in September.
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First Published:
July 31, 2025, 13:07 IST
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