Stock Market Soared, Then Slipped — What Spooked Dalal Street After A Rs 7 Lakh Crore Rally?

Key Highlights

• Global markets saw a relief rally after Trump softened his stance on imposing tariffs on Europe.
• Trump backed away from earlier threats after outlining a framework with NATO on Greenland’s future, following discussions with NATO Secretary General Mark Rutte at the World Economic Forum in Davos. Trump’s shift in tone helped calm markets that had been under pressure due to fears of a full-blown trade war between the US and the European Union and its broader impact on global growth.“Trump's message that the US would 'refrain from imposing tariffs on Europe' takes away the threat of a US-Europe trade war, which was dragging the markets down,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments. One additional reason is also the optimism around an India–US trade deal.
• Trump expressed admiration for Prime Minister Narendra Modi and confidence that the two countries were moving towards a favourable deal.
• “I have great respect for your Prime Minister.
• He’s a fantastic man and a friend of mine, and we are going to have a good deal,” Trump said. Q3 earnings have also been largely in line with the market expectations, making the sentiments more stable.