CHENNAI: Indian equity markets ended Monday (January 12) on a steadier note after a volatile session in which sharp early losses were reversed by a strong recovery in the second half of the day, underlining the market’s growing sensitivity to global cues and geopolitical developments. The Sensex closed with moderate gains while the Nifty 50 managed to finish above the key 25,750 mark, a level that traders had been closely watching as a short-term technical pivot.
The day began on a cautious footing, with stocks opening lower and selling pressure quickly building across large parts of the market. Banking, technology and several heavyweights came under pressure in early trade, pushing the benchmark indices sharply into the red. Weak global cues and lingering concerns about trade and tariff risks kept investors defensive through the morning, and by late morning the Sensex had slipped more than 700 points from its previous close, reflecting a broad risk-off mood.
Sentiment, however, shifted decisively as the session progressed. Buying interest emerged in heavyweight stocks and select cyclical names, helping the indices recover lost ground. Reports of active engagement between India and the United States on a potential trade deal, with another round of talks scheduled for the coming days, helped calm fears around trade disruptions and encouraged investors to step back into equities. This change in tone sparked a swift rebound, with short covering and fresh institutional buying combining to lift the market sharply off its intraday lows.
By the close, the Sensex had erased most of its earlier losses to end the day in positive territory, while the Nifty not only recovered but also managed to hold above 25,750, a level that had been seen as an important near-term support and resistance zone. The late-session rally suggested that investors were willing to defend key technical levels despite the broader uncertainty that has dominated recent sessions.
Sectorally, the recovery was led by select large-cap stocks in energy, metals and consumer names, which attracted value buying after recent declines. Shares of Reliance Industries outperformed the broader market and provided crucial support to the indices, while metal and paint stocks also saw renewed interest. Banking stocks were mixed, with some private lenders recovering from early weakness but not fully participating in the rally, indicating that investors remained cautious on financials amid concerns over asset quality and margins. Technology stocks also showed a patchy performance, reflecting ongoing worries about global demand and the outlook for overseas earnings.
"The markets staged a sharp V-shaped recovery in today’s session, with the Nifty 50 rebounding strongly from the 25,473 support zone, snapping a five-session consecutive sell-off. Market sentiment improved on supportive global cues, including renewed optimism around India–US trade talks after remarks by the newly appointed US ambassador to New Delhi, Sergio Gor, on continued bilateral engagement and fresh discussions scheduled for Tuesday (January 13). By the close, the benchmark indices had erased early losses and moved into positive territory, aided by short covering from oversold levels," said Enrich Money CEO R Ponmudi.
Market breadth remained somewhat uneven even as the benchmarks closed higher, with several mid-cap and small-cap stocks failing to match the strength seen in the frontline indices. This suggested that while short-term traders and large investors were willing to take positions in heavyweights, broader risk appetite across the market was still restrained.
From a technical and sentiment perspective, Monday’s close carried important signals. The ability of the Nifty to rebound strongly from lower levels and end above a key support zone reduced the immediate downside risk and pointed to the presence of buyers on dips. At the same time, the fact that the recovery was driven largely by late-session flows and select large caps indicated that confidence remains fragile and highly dependent on news flow, particularly on global trade and geopolitical developments.
Overall, the Indian market’s performance on January 12 reflected a delicate balance between caution and opportunism. Investors remain wary of external risks and recent volatility, but the sharp intraday turnaround showed that money is still ready to return when the outlook appears even marginally clearer. The focus in the coming sessions is likely to remain on developments in India-US trade talks, global market trends and domestic policy cues, all of which will determine whether Monday’s recovery can evolve into a more sustained move or remains a brief respite in a choppy trading environment.