Sensex and Nifty Performance Overview

The benchmark Sensex opened flat, initially down by 70.76 points, but quickly reversed course to climb 378.48 points during the session, ultimately closing with a gain of 449.24 points or 0.53%. The index ended just 0.61% shy of its 52-week high of 86,159.02, signalling sustained bullish momentum. The Nifty followed a similar trajectory, supported by strong buying interest in mid and small caps.

Technical indicators remain favourable, with the Sensex trading comfortably above its 50-day moving average (DMA), which itself is positioned above the 200 DMA, indicating a positive medium-term trend. This alignment suggests that the market is in a healthy uptrend, supported by steady investor confidence.

Sectoral Trends: NiftyCPSE Leads, FMCG Trails

Out of 38 sectors tracked, 36 advanced while only 2 declined, underscoring broad-based strength. The NiftyCPSE sector outperformed with a robust gain of 2.88%, driven by renewed interest in public sector enterprises amid expectations of government reforms and improved earnings visibility. Conversely, the NiftyFMCG sector declined by 1.41%, weighed down by profit-booking in select heavyweight consumer stocks.

Other sectors such as banking, IT, and energy showed mixed but generally positive trends, with midcaps and small caps outperforming large caps, reflecting a rotation towards growth-oriented and value stocks outside the large-cap universe.

Market Breadth and Capitalisation Trends

The advance-decline ratio across the BSE500 was a healthy 2.52x, with 358 stocks advancing against 142 declining. This breadth confirms the strength of the rally and suggests participation across market capitalisation segments.

Midcap stocks led the gains, with the BSE Midcap index rising 0.9%, while small caps also advanced 0.71%. Large caps traded relatively flat, gaining a modest 0.61% as investors selectively rotated funds into mid and small caps for higher growth potential.

Top Gainers and Losers Across Market Caps

Among the BSE500 constituents, SJVN emerged as the top gainer with an impressive 11.25% surge, reflecting strong investor interest in renewable energy and infrastructure plays. IDBI Bank followed with a 9.69% gain, supported by positive credit growth outlook and improving asset quality. Ola Electric also rallied 9.46%, buoyed by optimism around electric vehicle adoption and government incentives.

On the downside, Radico Khaitan fell 4.81% amid subdued demand outlook in the spirits segment. Embassy Developments declined 3.94% on profit-booking after recent gains, while Sapphire Foods dropped 3.71%, reflecting sector-specific headwinds.

Large Cap Movers

Within large caps, Coal India was the standout performer, surging 6.71% on expectations of improved coal demand and favourable government policies. Conversely, ITC was the largest large-cap laggard, declining 3.70% amid concerns over margin pressures and regulatory scrutiny.

Mid and Small Cap Highlights

Midcap stocks such as GE Vernova T&D slipped 2.26%, while small caps experienced sharper volatility. Shalimar Paints led small cap gains with a remarkable 14.74% rise, driven by strong volume growth and margin expansion. However, Cupid plummeted 19.99%, reflecting company-specific challenges and investor caution.

Foreign Institutional and Domestic Institutional Activity

Foreign Institutional Investors (FIIs) remained net buyers, continuing their positive stance on Indian equities amid stable global macroeconomic conditions. Domestic Institutional Investors (DIIs) also supported the market with steady inflows, particularly in midcap and select large-cap stocks, reinforcing the bullish sentiment.

Global Cues and Their Impact

Global markets showed mixed trends, with US indices consolidating after recent gains and Asian markets trading cautiously ahead of key economic data releases. Crude oil prices remained stable, providing some relief to inflation concerns. The Indian market’s resilience amid these global uncertainties highlights strong domestic fundamentals and investor confidence in the growth trajectory.

Upcoming Corporate Earnings to Watch

Investors are closely monitoring the upcoming quarterly results of marquee companies such as TCS and HCL Technologies, both scheduled to report on 12 Jan 2026, followed by ICICI Prudential Life on 13 Jan 2026. These results are expected to provide further clarity on sectoral trends and earnings momentum heading into the new fiscal year.

Outlook and Investor Takeaways

The current market environment suggests a cautiously optimistic outlook for Indian equities. The strong performance of midcaps and small caps indicates investor appetite for growth stocks, while the resilience of large caps like Coal India provides stability. The broad sectoral participation and healthy market breadth reinforce the positive sentiment.

However, investors should remain vigilant of potential volatility arising from global macroeconomic developments and upcoming corporate earnings. Selective stock picking, with a focus on quality fundamentals and valuation discipline, remains paramount in navigating the evolving market landscape.

Overall, the market’s ability to sustain gains near record highs, supported by institutional inflows and favourable technicals, bodes well for continued momentum in the near term.

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