Markets opened in green with the Sensex climbing over 1,000 points higher, a day after it saw its worst single-day decline in 10 months amid fears of possible recession and higher inflation owing to a trade war started by tariffs imposed by US President Donald Trump.

Nifty and Sensex jumped over 1.5 per cent, with Nifty trading above 22,500 and Sensex above 74,200. All sectoral indices witnessed sharp recovery. Analysts said panic selling has settled, adding that Trump may rethink his aggressive tariff stance.

Markets in Australia and Asia showed signs of recovery. Japan’s Nikkei index rose 6 per cent, rebounding from a 1.5-year low hit in the previous session, after Trump and Japan Prime Minister Shigeru Ishiba agreed to open trade talks in a phone call..

Chinese blue-chips climbed 0.7 per cent, while South Korea’s Kospi rose 1.7 per cent and Hong Kong’s Hang Seng Index climbed 2.25 per cent.

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Indonesia’s Jakarta Composite slid over 9 per cent, while Vietnam’s benchmark index lost more than 5 per cent after coming back from a holiday. Thailand’s SET fell over 4 per cent, its lowest level since March 2020. Australia’s S&P/ASX 200 added 0.18 per cent at the open.

Pan-European STOXX 50 futures rallied 2.2 per cent, while US S&P 500 futures rose 0.9 per cent.

The market rebound comes a day after Indian benchmark indices suffered one of their worst declines in five years. The 30-share BSE benchmark Sensex tanked 2,226.79 points, or 2.95 per cent, to settle at 73,137.90 on Monday. During the day, the benchmark index slumped 3,939.68 points, or 5.22 per cent, to 71,425.01.

The NSE Nifty tumbled 742.85 points, or 3.24 per cent, to settle at 22,161.60. Intra-day, the benchmark dropped 1,160.8 points, or 5.06 per cent, to 21,743.65.

Sensex and Nifty had previously tumbled over 13 per cent on March 23, 2020 when lockdown was imposed due to the Covid-19 pandemic.

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Markets across the globe bore the brunt of US President Donald Trump’s tariff hikes and retaliation from China. In Asian markets, Hong Kong’s Hang Seng index tanked more than 13 per cent, Tokyo’s Nikkei 225 plunged nearly 8 per cent, Shanghai SSE Composite index dropped over 7 per cent and South Korea’s Kospi sank over 5 per cent.

European markets, too, came under heavy selling pressure and were trading with over 4 per cent decline.

US markets ended significantly lower on Friday. The S&P 500 tanked 5.97 per cent, Nasdaq composite slumped 5.82 per cent, and the Dow tumbled 5.50 per cent on Friday.