Indian equities saw a cautious start on Tuesday as benchmark indices opened lower, but early losses were quickly trimmed, extending Monday’s tentative recovery after what was a brutal week for the market.
Investors seem to be weighing hopes of progress on an India–US trade deal against worries over global tariffs and foreign fund outflows.
On Monday, the Sensex and Nifty snapped a five‑session losing streak, staging a sharp intraday comeback after deep morning losses. The Sensex, which had tumbled over 700 points in early trade to slip below 83,000, finally closed 301.93 points higher at 83,878.17, while the Nifty rebounded from around 25,473 to end up 106.95 points at 25,790.25.
The bounce was led by buying in energy, banking, metal and select consumer stocks like Tata Steel, Asian Paints, SBI, Hindustan Unilever, UltraTech Cement, ICICI Bank and Bharti Airtel. Despite the hype, IT and some financials such as Infosys, Bajaj Finance, BEL, L&T and HDFC Bank lagged, reflecting continued caution around global growth and margins.
India–US trade signals
Sentiment improved on Monday after US Ambassador Sergio Gor said no country was as “essential” as India for Washington and signalled active work on a trade deal, while also indicating that India would be invited to join the US‑led “Pax Silica” strategic initiative on critical minerals and AI. His remarks helped calm recent jitters over tariffs and visas, prompting bargain hunting and short covering from oversold levels.
Market strategists say this diplomatic outreach, coming after weeks of pressure over potential US tariffs, gave traders a reason to buy beaten‑down stocks, even as geopolitical risks remain elevated. In the background, foreign investors were still net sellers on January 12, offloading more than Rs 3,400 crore worth of shares, while domestic institutions stepped in with strong net buying of about Rs 5,500 crore, cushioning the downside.
Watchlist: Iran, auto numbers, earnings
In Tuesday’s morning session, the Nifty briefly slipped but recovered towards 25,775, while the Sensex also pared early losses, indicating that buyers are willing to defend key support zones in the near term.
Analysts caution, however, that with foreign selling continuing and global tariff headlines in focus, the market may remain range‑bound and volatile, with stock‑specific moves driven by upcoming Q3 results and further clarity on India–US trade talks.
In the meantime, preliminary December automobile sales figures were published by the Society of Indian Automobile Manufacturers (SIAM). According to the industry body, passenger vehicle dispatches from companies to dealers increased 27 per cent year-on-year in December 2025. Total passenger vehicle sales in December stood at 3,99,216 units. Two-wheeler dispatches to dealers rose 39 per cent year-on-year to 15,41,036 units in December.
However, the jury is yet to be out on the impact of the latest comments by US President Donald Trump on slapping additional 25 per cent tariffs on key trading partners of the Islamic Republic of Iran. India has strong maritime and trade links with Iran.