The Sensex had fallen as much as 715.17 points, or 0.85%, to an intraday low of 82,861.07 earlier in the session, while the Nifty 50 briefly slipped below 25,500.
As of 1:11 PM, the Sensex was up 71 points, or 0.08%, at 83,647.17, and the Nifty was higher by 37 points, or 0.14%, at 25,738.40, after both benchmarks traded deep in the red in the morning.
Ambassador remarks spark reversal
Markets reacted swiftly after Gor, who assumed charge in New Delhi on Monday, signaled continuity in trade discussions between the two countries and framed differences as manageable within a broader strategic partnership.
“The India-U.S. relationship is rooted in genuine friendship,” Gor said. “Real friends can disagree, but resolve the difference.”
He confirmed that India and the United States continue to “actively engage” on trade issues, with the next round of talks expected as early as January 13, underlining that negotiations remain on track despite disagreements over tariffs and market access.
In his brief public address, Gor also conveyed greetings from U.S. President Donald Trump to Prime Minister Narendra Modi, saying, “Trump has conveyed his best wishes to Prime Minister Narendra Modi. Their relationship is genuine.”
PaxSilica announcement adds tailwind
Investor sentiment was further buoyed by Gor’s announcement that India would be invited to join PaxSilica, a U.S.-led strategic initiative aimed at building a secure and innovation-driven silicon supply chain.
“I am pleased to announce that India will be invited to join PaxSilica as a full member next month,” he said.
“I also want to share with you today a new initiative that the United States launched just last month called PaxSilica. PaxSilica is a US-led strategic initiative to build a secure, prosperous, and innovation-driven silicon supply chain from critical minerals and energy inputs to advanced manufacturing, semiconductors, AI development, and logistics,” Gor added.
He noted that countries already part of the initiative include Japan, South Korea, the United Kingdom and Israel, and said India’s inclusion would strengthen cooperation across the silicon value chain, from raw materials to advanced manufacturing and logistics.
According to Gor, PaxSilica has partnered with Australia, Japan, South Korea, the United Kingdom, Singapore and Israel, with a formal declaration signed at the PaxSilica Summit in Washington, DC.
A statement from the U.S. Department of State said the initiative aims to reduce coercive dependencies and protect materials and capabilities foundational to artificial intelligence. “PaxSilica is a positive-sum partnership. It is not about isolating others but about coordinating with partners who want to remain competitive and prosperous,” an Office of the Spokesperson of the U.S. State Department said.
Broad-based market recovery
The relief rally extended beyond the benchmarks. Bank Nifty rebounded sharply, rising about 677 points, or more than 1%, from its day’s low to 59,540.95. The Nifty Midcap 100 and Nifty Smallcap 100 indices also erased a significant portion of their early losses.
Export-oriented stocks, which had been under pressure after earlier remarks from Trump threatening tariffs of up to 500%, climbed to their session highs as fears of an immediate escalation receded.
The rebound was also supported by value buying after five consecutive sessions of decline last week, when markets were weighed down by profit-taking, foreign fund outflows, concerns over possible additional U.S. tariffs on Indian exports and broader geopolitical uncertainties.
Over the past five trading days, the BSE Sensex has fallen 2,185.77 points, or 2.54%, while the Nifty has declined 645.25 points, or 2.45%, underscoring how fragile sentiment had become ahead of Monday’s sharp reversal.
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