Top indices
Indian equities began 2026 on a quiet note as the majority of global markets remained closed for New Year. Thin participation and mixed sectoral trends left the headline indices largely unchanged. The BSE Sensex slipped 0.04 %, closing at ≈85,188.60, while the NSE Nifty 50 added 0.06 % to finish at ≈26,146.55. Mid‑cap stocks outperformed, and financials and autos provided support, whereas FMCG stocks weighed on the market due to a cigarette‑tax–driven sell‑off. Key index levels are summarised below.
| Index (close) | Level | % change | Notes |
|---|---|---|---|
| Sensex | ≈85,188.60 | –0.04 % | benchmark 30‑share index slipped slightly as FMCG lagged and autos offset losses. |
| Nifty 50 | 26,146.55 | +0.06 % | closed near all‑time high; closed above 26 k; remained in a narrow 26,113–26,198 range. |
| Nifty Midcap 100 | ~47,081 | +0.30 –0.44 % | mid‑caps outperformed; investors rotated into select growth names. |
| Nifty Smallcap 100 | ~51,515 | –0.05 % | small‑caps lagged; risk appetite stayed subdued. |
| Bank Nifty | ≈59,600 | +0.22 % | banking index hit 59,700 intraday; support from PSU and private lenders. |
| BSE Mid‑cap | 47,081.61 | +0.27 % | broad mid‑cap gauge gained on selective accumulation. |
| BSE Small‑cap | 51,515.35 | –0.02 % | marginal decline reflects caution in riskier names. |
| BSE 500 | 37,497.10 | +0.14 % | advance‑decline ratio ~0.93 × (241 advances vs. 258 declines). |
Sectoral performance
The session saw 32 of 38 sectors advance. Telecom led the pack on expectations of improved earnings and regulatory clarity, helped by a 1.55 % jump in the S&P BSE Telecom index. Utilities (Power) also outperformed (~1.6 %), buoyed by gains in NTPC and Power Grid. By contrast, FMCG stocks tumbled about 3.1 %, with cigarette makers ITC and Godfrey Phillips crashing after the finance ministry announced a new excise duty on cigarettes effective February 1. The table below summarises the broad sectoral moves.
| Sector | % change (approx.) | Major drivers |
|---|---|---|
| Telecommunication | ≈+1.55 % | rally in Vodafone Idea, Adani Total Gas and TRIL on hopes of regulatory clarity and earnings recovery. |
| Utilities / Power | ≈+1.6 % | NTPC and Power Grid climbed on resilient demand and capacity additions. |
| Auto | +1 % | strong December sales; Mahindra & Mahindra (+1.4 %) and Ashok Leyland (+3.2 %) hit record highs. |
| Pharma | ≈+3.4 % | defensive buying; Ajanta Pharma and Sun Pharma rallied. |
| IT | ~+0.6 –0.8 % | bargain‑hunting in large caps; Wipro and Infosys edged higher. |
| Metal | ≈+0.8 % | L&T and Hindalco touched record highs. |
| Banking (PSU & Private) | ≈+0.2 –0.5 % | healthy credit growth; selective buying ahead of earnings. |
| Realty | ≈+0.8 % | sector extended rebound, aided by robust bookings. |
| Oil & Gas | ≈+0.0 % | flat; crude prices remained steady. |
| Media/Telecom | ≈+0.3 % | small gains despite low volumes. |
| FMCG | ≈–3.1 % | worst‑performing segment; ITC (–9 %) and Godfrey Phillips (–15 %) fell after a steep excise duty hike on cigarettes. |
Key statistics
- Market breadth: In the BSE 500 index, 241 stocks advanced against 258 decliners, giving an advance–decline ratio of ~0.93 ×—indicative of slightly negative breadth.
- Volatility: India VIX eased toward the 10–11 zone, reflecting subdued implied volatility; it was around 10.8, down about 3 % from the previous session.
- FII/DII flows: According to provisional data for 31 December 2025, foreign portfolio investors sold approx. ₹3,597 crore, while domestic institutional investors bought about ₹6,759 crore, providing strong counter‑support.
- Put–Call Ratio (PCR): The Nifty PCR on 1 January was ~1.27, signalling bullish sentiment with higher put writing at 26,000 strikes.
- Option open interest: Highest call open interest stood at 26,400 on Nifty, while maximum put OI was at 26,000, suggesting a firm base around 26 k; on Bank Nifty, call OI clustered at 59,500/60,000/61,000 and put OI at 59,500.
Top gainers and losers
Top performers came mostly from mid‑cap and small‑cap counters, while tobacco and select consumer names recorded the steepest losses. The list below summarises notable moves (percentage changes approximate):
| Top gainers | % change | Drivers |
|---|---|---|
| Filatex Fashions (small‑cap) | +14.8 % | strong buying in micro‑cap textiles. |
| Vodafone Idea | +8.8 % | share bounced after promoters announced a ₹5,836 crore funding plan. |
| Transformers & Rectifiers | +8.0 % | recovery from previous slump and robust order book. |
| Ajanta Pharma | ≈+6.0 % | positive product‑pipeline commentary and defensive buying. |
| Finolex Cables / Adani Power | ≈+4–4.5 % | operational updates and renewed investor interest. |
| Top losers | % change | Reasons |
|---|---|---|
| Godfrey Phillips | ≈–15 % | sharp fall after new excise duty on cigarettes. |
| ITC | ≈–9 % | weighed down by cigarette tax announcement; largest drag on FMCG index. |
| Deepak Fertilisers | ≈–3.5 % | resumed decline after profit‑taking. |
| Gillette India / Westlife Foodworld | ≈–3 % | profit‑taking amid weak consumer sentiments. |
| KPR Mill / CCL Products | ≈–3 % | sector‑specific weakness and lower volumes. |
Sensex gainer/loser snapshot: On the Sensex, NTPC (+1.9 %), Larsen & Toubro (+1.3 %), Power Grid (+1.2 %) and Mahindra & Mahindra (+1.1 %) led the gains. The major drags were ITC (–9.7 %), Bajaj Finance (–1.5 %), Asian Paints (–0.6 %), BEL (–0.5 %) and ICICI Bank (–0.4 %).
What moved the market
- Cigarette tax shock: The finance ministry announced an excise duty ranging from ₹2,050–8,500 per thousand cigarettes (effective 1 February). This triggered a steep sell‑off in tobacco stocks. Heavyweight ITC and Godfrey Phillips together wiped out nearly ₹1 trillion in market capitalisation, dragging the FMCG index lower and capping gains in the broader market.
- Auto rally: Monthly sales data showed healthy year‑on‑year growth in December, aided by tax cuts and festive demand. This lifted the Nifty Auto index by around 1 %, with Mahindra & Mahindra and Ashok Leyland notching record highs.
- Telecom momentum: Investors rotated into telecom and allied stocks such as Vodafone Idea and Adani Total Gas on optimism about industry recovery and potential tariff hikes.
- Low global participation: With most international markets closed for New Year’s Day, trading volumes remained thin, and domestic factors (FII selling vs DII buying) dominated price action. Thin liquidity limited volatility and kept indices range‑bound.
- Sector rotation: Investors continued to rotate away from over‑valued FMCG names into utilities, pharma and mid‑caps, reflecting a search for growth and defensive hedges ahead of upcoming earnings.
Global cues
- Wall Street: U.S. indices ended the final trading day of 2025 lower (Dow Jones –0.62 %, S&P 500 –0.72 %, Nasdaq Composite –0.74 %) in light holiday trading, though all three posted double‑digit gains for 2025. Selling pressure was mainly due to position‑squaring before year‑end and caution ahead of the January FOMC meeting.
- Europe: Major European benchmarks were mixed—FTSE 100 slipped roughly 0.07 %, while Germany’s DAX, France’s CAC 40 and the Euro Stoxx 50 gained around 0.5–0.6 %—reflecting resilience despite macro‑growth concerns.
- Asia: Most Asian markets were closed. China’s Shanghai Composite and Shenzhen indices logged annual gains of ~18 % and ~29 % in 2025, while Hong Kong’s Hang Seng rallied ~28 % for its best year since 2017. Markets will reopen later in the week.
- Currency & commodities: The rupee edged lower, hovering around ₹89.95 per U.S. dollar amid corporate dollar demand. Oil prices were largely steady as traders assessed Middle Eastern tensions and demand outlook.
Stocks to watch and corporate updates
Several company‑specific developments are likely to influence trading in the days ahead:
- Vodafone Idea: Promoter Vodafone Group will inject ₹5,836 crore under a revised implementation agreement, bolstering liquidity and aiding debt reduction.
- Hyundai Motor India: Announced vehicle price hikes from January 1 to offset higher input costs—watch for impact on margins and demand.
- NBCC India: Secured three new domestic contracts totalling ₹220.31 crore (Canara Bank head office and two school infrastructure projects). Order book strength supports revenue visibility.
- Housing & Urban Development Corp (HUDCO): Reported provisional loan sanctions of ₹1.39 lakh crore in the first nine months of FY26, including ₹46,167 crore in Q3—signals robust project pipeline.
- RBL Bank: Its proposal to temporarily cap foreign shareholding at 24 % was not approved, removing an overhang on the counter.
- NCC: Announced four new orders worth ₹1,237.24 crore, signalling continued strong order inflow.
- Redington: Received a GST assessment order of ₹148.33 crore from tax authorities covering FY19–FY22—potential short‑term overhang.
- Blue Dart Express: The company’s subsidiary had ₹420.79 crore GST demand largely withdrawn, leaving only ₹64.98 lakh payable; removal of a major liability is a positive.
- Indian Railway Finance Corporation (IRFC): Entered a ₹5,000 crore rupee term loan agreement with MAHAGENCO, with ₹3,000 crore already disbursed.
- Berger Paints: Promoter UK Paints (India) purchased 14.48 % stake from Jenson & Nicholson, raising its holding to 64.57 % and signalling promoter confidence.
- Multi Commodity Exchange (MCX): The exchange will trade ex‑split on 2 January as its 1:5 stock split becomes effective (each ₹10 share splits into five ₹2 shares). Investors holding the stock on the record date (January 2) will receive additional shares; the split aims to improve liquidity.
- Record highs & 52‑week highs: Shares of Larsen & Toubro, Hindalco Industries, Titan Company, BPCL, TVS Motor, Shriram Finance and Bharat Petroleum hit record or 52‑week highs, reflecting strong momentum in industrials and consumption plays. Reliance Industries, Bajaj Auto and Indus Towers also touched fresh highs.
Technical outlook & market tone for 2 January 2026
Nifty
- The index closed near 26,146, forming a small bullish candle. Immediate supports are 26,010–26,000, followed by 25,960 and 25,880. Resistances lie at 26,180, 26,230 and 26,315.
- Options data show heavy put writing at 26,000 and call writing around 26,400, indicating a strong base at 26k. A decisive break above 26,230 could open the path toward 26,315–26,400, while failure to hold 26,000 may invite profit‑taking toward 25,880.
Bank Nifty
- The banking index settled around 59,600, maintaining a positive bias. Support levels are seen at 59,290, 59,150 and 58,930, with additional Fibonacci support near 58,985 and 58,635. On the upside, resistances reside at 59,730, 59,870 and 60,090.
- Options positioning points to strong support at 59,500 and significant call OI at 60,000 and 61,000. A close above 59,870 may trigger momentum toward the psychological 60 k mark.
Expected tone for the next session (Jan 2 2026)
- Range‑bound with positive bias: Given the absence of major global triggers and thin holiday week volumes, markets are likely to consolidate near current levels. DIIs continue to support equities, while FPIs remain cautious.
- Watch autos and utilities: Strong sales and infrastructure spending should keep autos, power utilities and industrials in focus. Telecom stocks may extend gains on earnings optimism.
- Cautious on FMCG: The cigarette tax shock may continue to weigh on FMCG stocks; any further clarity on pricing or government policy could ease pressure.
- Corporate earnings: Earnings season kicks off with Corona Remedies on January 2 and heavyweights TCS and HCL Technologies on January 12; guidance will shape sector‑specific moves.
- Macro cues: Investors should monitor FII/DII flow trends, rupee movement and global macro data (U.S. ISM manufacturing, FOMC minutes). Unexpected geopolitical events could induce volatility.
Overall, the Indian market heads into the second trading day of 2026 with a constructive yet cautious tone. Technical indicators remain supportive as long as Nifty holds above the 26,000 area; however, stretched valuations in select pockets and global uncertainty warrant nimble positioning and a stock‑specific approach.
