New Year Cheer for Indian Markets

The opening sessions of the New Year brought renewed optimism to domestic equity markets, even as multiple geopolitical flashpoints continued to dominate the global landscape. After spending several weeks moving in a narrow range, Indian benchmark indices finally broke out of consolidation mode. Both the BSE Sensex and the Nifty 50 registered a meaningful up-move at the start of 2026, inching closer to fresh record highs. A decisive technical breakout near previous peaks triggered fresh buying interest and improved overall sentiment.[EasyDNNnews:PaidContentStart]

Encouragingly, the positive momentum was not limited to frontline indices alone. Broader markets also staged a notable recovery, with the BSE Mid-Cap and BSE Small-Cap indices gaining over 2 per cent each during the period. Sectorally, the market mood remained largely upbeat. Most sectoral indices traded firmly in positive territory, barring information technology and FMCG. Several sectors delivered strong returns, with metals emerging as the standout performer. The BSE Metal Index surged more than 8 per cent over the last fortnight, extending its robust uptrend.

The rally was supported by a sharp rise in global metal prices, with copper and aluminium touching record highs amid tight supply conditions and resilient demand. Adding to the optimism, the Indian government imposed a three-year safeguard duty on certain imported steel products, providing domestic steelmakers protection from cheap overseas supplies and improving pricing visibility. Auto stocks also attracted strong buying interest during the period.

A broad-based rally, led by metals, power and autos, signals improving investor confidence as Indian markets shake off global concerns to start 2026 on a positive note.

Indian retail vehicle sales recorded a sharp year-on-year growth of nearly 15 per cent in December 2025, driven by year-end demand, Tax incentives and expectations of price hikes by original equipment manufacturers from January. Positive sentiment ahead of the Q3FY26 earnings season further lifted auto counters. In contrast, FMCG stocks underperformed the broader market as investors rotated out of defensive sectors amid the rally in cyclical and value segments. Profit-taking was aggravated by a key policy development, namely the government’s decision to raise excise duty on cigarettes. This move dealt a sharp blow to tobacco stocks, which form a significant part of the FMCG universe.

Shares of ITC Ltd declined sharply, plunging around 13 per cent over just two trading sessions. On the institutional front, foreign investors remained net sellers, with outflows of around ₹17,500 crore during the period. Domestic institutional investors, however, continued to provide strong support to the market, recording inflows of nearly ₹29,800 crore and cushioning the impact of foreign selling. Looking ahead, the direction of Indian markets will be guided by developments on the geopolitical front, the U.S. Federal Reserve’s interest rate decision, the outcome of the Q3FY26 earnings season and expectations surrounding the Union Budget. Stay tuned for further updates!

[EasyDNNnews:PaidContentEnd] [EasyDNNnews:UnPaidContentStart]

[EasyDNNnews:UnPaidContentEnd]