Indian equity markets staged a strong rebound on Thursday, finally breaking a prolonged losing streak as global risk sentiment improved and traders rushed to cover short positions. The S&P BSE Sensex jumped 789.57 points to close at 82,699.20, while the NSE Nifty50 surged 252.95 points to end at 25,410.45, catching many investors by surprise after weeks of steady declines.

The rally was largely driven by easing global concerns after US President Donald Trump dialled back two major threats that had unsettled markets. Trump softened his stance on taking Greenland by force and stepped away from imposing fresh tariffs on Europe, significantly reducing fears of a potential US-Europe trade war. Global markets responded positively, and Indian equities followed suit.

Analysts said markets were technically oversold and primed for a rebound, with the easing of geopolitical and trade-related anxieties acting as the trigger. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the withdrawal of aggressive US posturing and tariff threats removed a major overhang on global markets. He added that with nearly two lakh short contracts in the system, conditions were ripe for a sharp short-covering rally.

Brokerage reports echoed the optimism, noting that recent sell-offs had pushed valuations to attractive levels, encouraging bargain hunting. Some analysts also pointed to a slowdown in foreign investor selling, offering a tentative sign of stabilisation.

On the domestic front, corporate earnings remained mixed, with third-quarter results impacted by higher provisions linked to the new labour code—an effect analysts believe is largely one-off. Adding to the positive sentiment, Eternal posted stronger-than-expected revenue and profit growth in its quick commerce business, providing a rare domestic catalyst for the market.

While it may be premature to declare an end to volatility, Thursday’s rebound suggests recent market weakness was driven more by fear than fundamentals. If global cues remain supportive and earnings deliver no major surprises, investors could see a period of relatively steadier trading on Dalal Street.