Nifty Ends 3-Day Rally as IT Selloff and HDFC Bank Weigh; Sensex Falls 320 Points

Market Update at 04:00 PM: Indian equity benchmarks ended lower on Monday, January 5, 2026, snapping a three-day winning streak amid heavy selling in IT stocks and renewed global trade concerns. Weakness in HDFC Bank and cautious sentiment following tariff-related remarks from US President Donald Trump dragged the markets into negative territory.

After opening slightly higher, the Nifty 50 touched a fresh record high during Intraday trade but failed to hold gains and slipped into the red. At the close, the Nifty 50 declined 78.25 points, or 0.30 per cent, to settle at 26,250.30. The Sensex fell 322.39 points, or 0.38 per cent, to end at 85,439.62.

Market sentiment remained under pressure due to a combination of sector-specific weakness and rising global uncertainties. IT stocks witnessed broad-based selling, with the Nifty IT index falling 1.43 per cent, as concerns over potential higher US tariffs on Indian goods outweighed positive business updates and expectations of better quarterly earnings.

Adding to the cautious mood were renewed geopolitical tensions and trade-related uncertainty. Comments from US leadership on possible tariff hikes against India, along with broader global developments, raised concerns about future trade relations and overall economic stability, particularly for export-oriented sectors.

Among individual stocks, Sobha surged 5.79 per cent after reporting a strong 52.3 per cent jump in Q3 sales. Ujjivan Small Finance Bank gained 4.90 per cent following a sharp rise in quarterly deposits. On the downside, HDFC Bank, the heaviest stock on the benchmarks, slipped 2.41 per cent after its quarterly update. Bajaj Finance declined 1.18 per cent as asset growth moderated to 22 per cent from 24 per cent in the previous quarter.

On the sectoral front, six out of eleven NSE sectoral indices closed in positive territory. The Nifty Realty index emerged as the top performer, rising 2.07 per cent and extending its winning streak to four consecutive sessions. Nifty FMCG, Nifty Media, and Nifty Metal indices also advanced by over 0.5 per cent. In contrast, the Nifty IT index was the worst-performing sector, declining 1.43 per cent and recording its biggest intraday fall in the last two months.

Broader market indices ended on a mixed note. The Nifty Midcap 100 index slipped 0.16 per cent, while the Nifty Smallcap 100 outperformed with a gain of 0.53 per cent.

Among the key contributors to the Nifty 50, ICICI Bank added 26 points, Axis Bank contributed 12.32 points, and Bharat Electronics added 8.01 points. On the other hand, HDFC Bank dragged the index down by 77.48 points, followed by Infosys at 27.88 points and Reliance Industries at 22.65 points.

Market breadth remained negative during the session. Out of 3,258 stocks traded on the NSE, 1,208 advanced, 1,943 declined, and 107 remained unchanged. A total of 129 stocks touched their 52-week highs, while 85 hit their 52-week lows. Additionally, 65 stocks were locked in Upper Circuits, whereas 81 stocks were in Lower Circuits.

Overall, the Nifty snapped its three-day rally amid IT sector weakness and global trade worries, with HDFC Bank emerging as the biggest drag on the benchmarks, while realty stocks led sectoral gains.

Market Update at 12:28 PM: The NSE Nifty 50 and BSE Sensex traded in a narrow range with a negative bias on Thursday, as IT stocks came under pressure.

As of 12:06 AM, the NSE Nifty was down 0.02 per cent or 6.80 points at 26,321.10, while the BSE Sensex fell 0.07 per cent or 83.79 points to 85,665.48.

Among individual stocks, Infosys, HCLTech, and Oil and Natural Gas Corp (ONGC) were the Top Losers in the Nifty 50 index. On the other hand, Bharat Electronics, Nestle India, and Eicher Motors emerged as the Top Gainers.

Broader market performance was mixed. The Nifty SmallCap 100 index rose 0.41 per cent, while the Nifty MidCap 100 index slipped 0.07 per cent.

Sectorally, the Nifty IT index was the biggest laggard, declining over 2 per cent, reflecting continued pressure on technology stocks.

Market Update at 10:12 AM: India’s benchmark equity indices traded marginally lower in early trade on Monday, January 5, 2026, as weakness in IT stocks and renewed concerns over US tariffs overshadowed upbeat quarterly business updates from select sectors.

The Nifty 50 briefly touched a record high of 26,358.25, rising up to 0.11 per cent, before reversing gains. The index was last trading down 0.11 per cent. The Sensex also slipped 0.17 per cent to 85,615.82 as of 9:25 a.m. IST, reflecting cautious investor sentiment.

Market sentiment was mixed despite broader Asian markets moving higher. Oil prices remained volatile as investors assessed the global impact of recent US military action in Venezuela, adding to overall uncertainty.

Within domestic markets, 12 of the 16 major sectoral indices advanced at the open. State-owned banks outperformed, with the PSU Bank index gaining around 1.3 per cent. Punjab National Bank and Bank of Baroda rose nearly 2 per cent each after releasing positive quarterly business updates, reinforcing expectations of improved earnings.

In contrast, IT stocks declined about 1 per cent. The sector came under pressure as concerns resurfaced over US trade policy. IT companies derive a significant portion of their revenue from the US, making them vulnerable to tariff-related developments.

Adding to the uncertainty, US President Donald Trump warned that tariffs on India could be increased if New Delhi did not cooperate on issues related to Russian oil imports. The US has already imposed a 50 per cent tariff on India, with half of it cited as a punitive measure linked to India’s purchase of Russian crude.

Meanwhile, broader markets showed resilience. The Small-Cap index gained around 0.5 per cent, while Mid-Cap stocks edged up 0.1 per cent, indicating selective buying outside frontline indices.

Pre-Market Update at 7:44 AM: Indian equity benchmarks Sensex and Nifty 50 are likely to open on a positive note on Monday, January 5, marking a strong start to the first week of 2026. Positive global cues and steady institutional flows are supporting market sentiment. Gift Nifty was trading higher by 76 points, or 0.29 per cent, at the 26,544 level, indicating a firm opening for domestic equities.

Asian markets were trading higher in early trade, while US markets ended mixed but largely positive on Friday. The supportive global backdrop has helped sustain risk appetite despite rising geopolitical concerns.

Foreign Institutional Investors turned net buyers on Friday, January 2, purchasing equities worth Rs 289.80 crore and snapping a seven-session selling streak. Domestic Institutional Investors continued to provide strong support by buying equities worth Rs 677.38 crore, marking their 49th consecutive session of net inflows.

Indian markets ended higher on Friday, with the Nifty 50 touching a fresh record high of 26,340 before closing at 26,328.55, up 182 points or 0.70 per cent. The Sensex gained 573 points to settle at 85,762. Realty and metal stocks led the rally, while FMCG stocks lagged. Market volatility remained low, with India VIX closing at 9.45.

On the stock-specific front, Coal India surged over 7 per cent to emerge as the top gainer. Larsen and Toubro touched an all-time high after securing a major order from SAIL. Broader markets also performed well, with midcap and smallcap indices ending in the green and overall market breadth strongly favouring advancing stocks.

US markets kicked off 2026 on a positive note, ending Friday mixed but largely higher after snapping a four-day losing streak. The Dow Jones rose 319 points, or 0.66 per cent, while the S and P 500 gained 0.19 per cent. The Nasdaq edged lower by 0.03 per cent. Semiconductor stocks led the rally, with the Philadelphia SE Semiconductor Index jumping 4 per cent, supported by strong gains in Nvidia and Intel. Industrial stocks such as Boeing and Caterpillar also advanced, while losses in heavyweight tech stocks like Apple and Microsoft, along with weakness in Amazon and Tesla, capped gains. Tesla slipped 2.6 per cent after reporting a second consecutive year of declining annual sales.

Gold prices climbed more than 1 per cent on Monday to trade above USD 4,380 per ounce, extending Friday’s gains as investors moved towards safe-haven assets following escalating US–Venezuela tensions. Silver prices also jumped sharply, opening with an upside gap and touching an intraday high of USD 75.968 per ounce, registering nearly a 6 per cent intraday gain.

Crude oil prices are expected to open higher after fresh geopolitical tensions emerged following a US attack on Venezuela. Brent crude, which ended below USD 61 per barrel on Friday, is expected to move towards the USD 62 to 65 range amid concerns over potential supply disruptions. However, the impact on India is expected to be limited, as India’s trade and energy exposure to Venezuela has declined sharply since 2019 due to US sanctions, leaving current imports and exports at negligible levels. Crude prices have struggled over the year due to increased output from OPEC and other major producers and slower global demand growth, reinforcing fears of a prolonged supply glut.

For today, SAIL will remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.