Mumbai, Jan 22, 2026, 16:12 IST
- Indian shares ended a three-day losing streak, buoyed by a rise in global risk appetite following Trump’s retreat from the Greenland tariff threat
- Profit-taking stalled the rally, as traders pointed to foreign selling and volatility tied to derivatives expiry
- Eternal and Dr. Reddy’s drew attention, with earnings and trade news shifting funds between sectors
Indian share indexes climbed Thursday, snapping a three-day losing streak after U.S. President Donald Trump backed off tariff threats targeting eight European nations and dismissed any plans to use force over Greenland. The Nifty 50 gained 0.53% to 25,289.90, while the Sensex rose 0.49% to 82,307.37 in late trade. 1
The bounce is significant given the market’s jittery run: trade tensions, geopolitical issues, uneven earnings, and a slumping rupee have all spooked traders into shedding risk. Despite Thursday’s gains, benchmarks remain roughly 3.3% lower for January. The past three sessions alone have sliced around 2% off the Sensex and Nifty.
The rally faltered as the Nifty dropped back under 25,300, with the Sensex losing roughly 500 points from its intraday high. Traders were quick to lock in profits. Provisional exchange data showed foreign institutional investors (FIIs) net sold ₹1,788 crore on Jan. 21, while domestic institutional investors (DIIs) net purchased ₹4,520 crore. 2
Fifteen out of 16 major sectors climbed, though caution lingered. Small-cap and mid-cap indexes advanced roughly 0.8% and 1.3%, respectively. MSCI’s Asia Pacific index, excluding Japan, added 0.9%, mirroring the wider risk-on sentiment.
“Sentiment improved,” said Gaurav Garg, an analyst at Lemonn Markets Desk, highlighting short-covering — where traders buy back borrowed shares to cover bets against the market — following the tariff rollback. Trump also stoked optimism, stating in Davos that the U.S. is “going to have a good deal (with India).”
Export-driven stocks led early moves, as some textile and shrimp exporters rallied on hopes of new trade agreements. Dr. Reddy’s Laboratories surged 5.2% following a quarterly earnings beat and India’s nod to produce and market a generic Ozempic. Meanwhile, Zomato’s parent company Eternal slipped 2.7%, weighed down by ongoing pressure in the quick-commerce—fast delivery—sector.
The previous day saw Indian stocks fall for the third session running amid choppy trading. The Sensex dropped 270.84 points to 81,909.63, while the Nifty slid 75 points to 25,157.50, briefly falling below the 25,000 mark intraday. ICICI Bank and Trent took a hit among the Nifty laggards, whereas Eternal jumped nearly 5% ahead of its earnings. 3
The rupee hasn’t been immune to the turmoil. It plunged to a record low of 91.7425 per U.S. dollar on Wednesday, closing slightly off that at 91.6950. Traders pointed out the Reserve Bank of India (RBI) largely stayed sidelined during the selloff. “Flows mainly drive the USD/INR pair,” said Kunal Sodhani, head of treasury at Shinhan Bank India, noting that RBI typically intervenes only if volatility spikes sharply. 4
Deven Choksey, managing director at DRChoksey FinServ, described Wednesday’s equity slide as “a wave of global turbulence” shaking domestic stocks amid a de-risking spree. Reuters reported that foreign investors offloaded $3.23 billion worth of Indian shares in January, following record outflows nearing $19 billion in 2025. 5
Traders pointed to India VIX, the volatility gauge based on options prices, which jumped almost 4%, signaling that investors are gearing up for more turbulence. The weekly futures-and-options (F&O) expiry in Sensex contracts contributed to the choppy action, as positions rolled over and hedges were quickly recalibrated.
The risk case remains active, not sidelined. “The 25,250–25,300 zone now acts as immediate resistance for Nifty,” noted Aakash Shah of Choice Broking. Jatin Gedia of Teji Mandi Investment Technologies added, “Unless the Nifty 50 reclaims 25,500 decisively, it is going to face selling pressure.” Shah also warned that slipping below 25,000 could pave the way down to 24,800–24,900.
Right now, the Indian stock market is reacting as much to headlines as to actual numbers — tariffs, trade talk, flows, earnings. The rebound feels more like a tentative probe than full confidence.
