The Bounce Nobody Expected: How Sergio Gor’s Trade Deal Signal Helped Markets Snap a 5-Day Losing Streak
| Index | Price | Change | % Chg |
| Nifty 50 | 25,790.25 | 106.95 | +0.42% |
| Nifty Bank | 59,450.50 | 198.95 | +0.34% |
| Nifty Financial | 27,518.50 | 136.40 | +0.50% |
| BSE SENSEX | 83,878.17 | 301.93 | +0.36% |
Indian equity markets found an unlikely saviour on January 12 — not in earnings, not in policy, but in diplomacy. After five consecutive sessions of losses and a fragile investor mood, benchmark indices staged a sharp intraday recovery that changed the tone of the session and the narrative for the week.
The Sensex rallied 302 points to close at 83,878.17, while the Nifty 50 ended at 25,790.25, up 0.42 percent, settling near the psychologically important 25,800 mark. What made the move remarkable was the context: both indices had opened in the red and extended losses in early trade before sentiment flipped decisively mid-session.
The trigger was a set of comments by US Ambassador to India Sergio Gor on the India–US trade deal, comments that traders quickly interpreted as a signal that one of the market’s biggest overhangs may finally be easing.
“Both sides continue to engage actively, and the next call on trade will take place tomorrow,” Gor said, adding that President Donald Trump is expected to visit India in the next one to two years.
For a market bruised by tariff fears, foreign outflows and geopolitical uncertainty, those lines were enough to shift behaviour within minutes.
Also Read : Sergio Gor’s Remark Sparks ‘Trump Candle’ as Sensex Stages 700-Point Comeback in an Hour
How the Market Actually Moved Through the Day
The session began on a weak note. Despite positive global cues, domestic markets opened lower and continued sliding through the first half.
The Nifty touched an intraday low of 25,473.40. Sentiment was fragile. Broader markets continued to underperform, with:
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BSE Midcap down 0.4 percent
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BSE Smallcap down 0.7 percent
But by noon, the narrative changed.
A sharp recovery began after Sergio Gor confirmed that India and the US are “actively engaged” on trade talks and that the next call is scheduled for January 13. The benchmarks rallied steadily from lows and closed near the day’s high.
Closing snapshot:
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Nifty 50: 25,790.25 (+0.42%)
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Sensex: 83,878.17 (+0.36%)
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Bank Nifty: 59,450.50 (+0.34%)
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Nifty held firmly above 25,700
From the day’s low, Sensex recovered nearly 1,000 points and Nifty bounced over 300 points — a dramatic shift in sentiment.
Here’s What Happened Today and Why Traders Reacted
The reaction was immediate once Gor’s comments hit trading terminals.
Traders and desks observed clear behavioural shifts:
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Aggressive short covering in index heavyweights
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Fresh intraday longs once Nifty reclaimed 25,600
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Buying in banking stocks ahead of Q3 earnings season
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Bounce in export-oriented stocks after weeks of tariff anxiety
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Broader participation as midcaps and smallcaps stabilised
Sunny Agrawal, Head of Fundamental Equity Research at SBICAPS Securities, explained the move clearly:
“Positive statement by U.S. ambassador on continuation of talks on India-U.S. trade deal and reiteration of the importance of India as a trade partner have led to short covering during the day.”
Ajit Mishra of Religare Broking added a note of caution:
“The recent bounce appears to be driven largely by short-covering in heavyweight stocks… Market participants should look for a sustained move above 25,600 to confirm any meaningful recovery.”
This confirms today’s move was tactical — not euphoric — but still structurally important.
Why Sergio Gor’s Comments Hit the Market So Powerfully
The market has been under pressure throughout 2025 due to uncertainty around Trump tariffs and the stalled trade deal.
Gor’s remarks directly addressed this anxiety.
“No partner is more essential than India,” Gor said.
“Both sides continue to actively engage. The next call on trade will take place tomorrow.”
“Real friends can disagree, but resolve the difference.”
“India is the world’s largest nation… not easy to cross the finish line, but we are determined.”
He also confirmed India’s inclusion in the Pax Silica strategic alliance:
“I am pleased to announce that India will be invited to join this group as a full member next month.”
Senator Marco Rubio reinforced the theme:
“This year will be a year of reciprocity.”
For markets, this was not just diplomacy. It was uncertainty reducing — and markets always react strongly when uncertainty begins to fade.
Sector and Stock Action Shows How Investors Positioned Today
Sectoral performance revealed where investors placed their bets.
Top gaining sectors:
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Metal: +1.99%
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FMCG: +0.59%
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Oil & Gas: +0.54%
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PSU Bank: +0.7%
Top losing sectors:
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Media: -1.55%
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Realty: -1.22%
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Pharma: -0.41%
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Auto: -0.27%
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Consumer Durables: -0.26%
Top Nifty gainers:
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Coal India (+3.39%)
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Tata Steel (+2.75%)
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Asian Paints (+2.50%)
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JSW Steel (+2.26%)
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Hindalco (+2.21%)
Top Nifty losers:
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Infosys (-1.02%)
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Bajaj Finance (-1.00%)
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Eicher Motors (-0.85%)
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Bajaj Auto (-0.88%)
The leadership of metals, banks and cyclicals indicates rotation into value and recovery themes.
Technical Signals Suggest Short-Term Trend Has Turned Positive
Technically, the session left behind a strong footprint.
Analysts observed:
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A long bullish candle with long lower shadow on daily charts
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Support held firmly near 25,500 on Nifty
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Momentum suggests possible move toward 26,000–26,100
Key levels highlighted by analysts:
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Support: 25,650 / 25,600
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Resistance: 25,900–25,950
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Below 25,600, sentiment could weaken again
However, derivatives data remains cautious:
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Put-Call Ratio at 0.48
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Heavy call writing still caps upside
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India VIX rose 4.05% to 11.37, indicating lingering nervousness
This tells investors: recovery has started, but conviction is still forming.
What This Means for Investors After ₹17 Lakh Crore Erosion in Wealth
Over the past six sessions, investors lost nearly ₹17 lakh crore as:
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Sensex fell 2,700 points
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Nifty slipped nearly 3%
Drivers behind the selloff included:
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Trump tariff fears
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FII selling
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Weak global cues
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Crude oil volatility
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Fragile technical structure
Today’s recovery alters that narrative slightly.
For investors, today’s impact is psychological and strategic:
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Panic selling has eased
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Value buying is emerging
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Banking stocks are gaining focus ahead of earnings
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Trade deal narrative is shifting from headwind to potential tailwind
However, this is not a “buy everything” environment. It is a selective accumulation phase.
Q3 Earnings Now Become the Next Decisive Trigger
Markets are now shifting attention to corporate results.
Key points:
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TCS and HCLTech report Q3 results on January 12
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Emkay Global expects 10.7% YoY topline growth
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But 42% of companies may report PAT growth below 10%
This suggests earnings may not fully justify aggressive rallies — meaning sentiment and global cues will remain dominant drivers.
Rupee, Global Markets and Macro Signals Also Supported Today’s Mood
The rupee also reflected improving sentiment.
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Rupee closed at 90.16 per dollar, up 2 paise
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Supported by weak dollar, lower crude, and trade optimism
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However, geopolitical uncertainty capped further gains
Global market cues were mixed:
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S&P 500 futures down 0.6%
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Nikkei futures up 3.4%
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Hang Seng up 1.3%
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Shanghai Composite up 1.1%
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Euro Stoxx futures flat
This suggests India’s recovery was domestically driven, not imported from global markets.
The Tariff Paradox: Why Trump’s 500% Threat May Hurt the US More Than India
An important macro layer is also shaping investor thinking.
Data shows India dominates key US import categories:
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59% of US bed linen imports
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81.5% of table linen imports
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69% of flexible packaging imports
This implies Trump’s proposed 500% tariff could raise prices for American consumers rather than hurt Indian exporters — weakening the perceived threat and indirectly supporting Indian market confidence.
Ban List, Stock Action and Broader Market Breadth Still Show Caution
Despite the recovery, internal market breadth remains weak:
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Advancers: 1,247
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Decliners: 1,891
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52-week lows: 459 stocks
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More than 360 stocks hit fresh yearly lows
The F&O ban list remains crowded, showing speculation remains elevated.
This tells investors one thing clearly: the market is recovering, but it is not healthy across the board yet.
A Market That Has Stopped Panicking — But Has Not Turned Euphoric
Today’s rally does not mark the start of a bull run. But it does mark something equally important: the market has stopped pricing only bad news.
The session showed:
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Traders are quick to reposition when narrative improves
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Investors are beginning to selectively accumulate
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Sentiment is highly sensitive to India–US developments
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Volatility will remain elevated in the near term
For investors, the message is simple but critical: this is not a time to exit in fear — but also not a time to chase blindly. Stock selection, sector focus and discipline matter more than ever.
FAQs Sensex Up 302 Points and Nifty Near 25,800
Why did the Indian stock market recover after five days of losses despite weak broader market breadth?
The market recovery was driven primarily by a sharp sentiment shift following positive remarks from US Ambassador Sergio Gor on India–US trade talks. Even though market breadth remained weak, short covering in heavyweight stocks, value buying after a 2.5% correction, and renewed optimism around geopolitical engagement helped benchmarks rebound sharply from intraday lows.
How did Sergio Gor’s comments on the India–US trade deal influence Sensex and Nifty intraday movement?
Gor’s confirmation that both countries are “actively engaged” and that the next trade call is scheduled immediately changed trader behaviour. This triggered aggressive short covering, fresh long positions above key technical levels, and renewed buying in banking and export-linked stocks — leading to nearly a 1,000-point recovery in Sensex from the day’s low.
Does the Nifty closing near 25,800 signal the start of a new uptrend for Indian equities?
Not necessarily. While technical indicators such as a bullish candle with long lower shadow suggest short-term strength, derivatives data like a low put-call ratio and heavy call writing indicate traders are still cautious. The market needs sustained follow-through above 25,900–26,000 to confirm a structural trend reversal.
Why are banking and metal stocks outperforming while midcaps and smallcaps continue to struggle?
Banking and metal stocks are benefiting from value buying, earnings expectations, and improving macro sentiment linked to trade optimism. Midcaps and smallcaps, however, remain under pressure due to stretched valuations, weaker liquidity, and higher sensitivity to risk-off behaviour — explaining why broader indices still underperform despite the headline recovery.
How should long-term investors adjust portfolios after the recent correction and sudden market rebound?
Investors should focus on selective accumulation rather than aggressive buying. The recent bounce suggests panic selling may be over, but volatility remains high. Allocating toward quality large-cap banks, strong balance sheet companies, and sectors with earnings visibility while avoiding overleveraged midcaps may offer better risk-adjusted positioning.
What does the rise in India VIX after the market recovery indicate about future volatility?
The rise in India VIX despite the rally suggests that uncertainty remains elevated. This typically indicates traders expect wider intraday swings ahead, meaning investors should prepare for continued volatility rather than assuming the correction phase is fully over.
Why are India–US trade negotiations becoming a key driver for Indian stock market sentiment in 2026?
Because global trade policy directly impacts foreign fund flows, export-oriented sectors, currency stability, and corporate earnings visibility. With Trump-era tariffs previously acting as a headwind, any positive momentum toward a deal reduces uncertainty — and markets historically react strongly when geopolitical risk perception begins to ease.
