Market Indices and Technical Trends

The Nifty index ended the session 190.75 points higher, inching closer to its 52-week high of 26,325.80, now just 0.75% away. Technical indicators remain constructive, with the Nifty trading above its 50-day moving average (DMA), which itself is positioned above the 200 DMA, signalling a sustained uptrend. The Sensex mirrored this positive momentum, gaining 545.52 points or 0.64% to close at 85,220.60.

Market breadth was notably strong, with 34 out of 38 sectors advancing on the NSE, reflecting broad-based buying interest. The advance-decline ratio across the BSE500 was a healthy 4.04x, with 400 stocks advancing against 99 decliners, underscoring the widespread participation in the rally.

Sectoral Performance: Oil & Gas Leads, Telecom Lags

The Oil & Gas sector emerged as the top performer, surging 2.73% on the back of strong gains in key constituents and positive global energy price trends. This sectoral strength was a key driver behind the indices’ upward trajectory. Conversely, the S&P BSE Telecommunication sector was the sole laggard, declining 0.74%, pressured by ongoing sector-specific challenges and weak earnings outlooks.

Small caps outperformed other market capitalisation segments, with the Nifty Small Cap 100 index rising 1.11%, followed by mid caps gaining 1.01% and large caps up 0.76%. This rotation into smaller stocks suggests investors are seeking growth opportunities beyond the blue-chip space.

Top Gainers and Losers Across Market Caps

Among large caps, JSW Steel led the gainers with a robust 4.89% rise, benefiting from strong steel demand and positive export prospects. HPCL was the top mid-cap gainer, rallying 6.37% amid the sector’s bullish momentum. Kiri Industries stole the spotlight in the small-cap space, soaring 18.36% on renewed investor interest and favourable sector dynamics.

On the downside, PB Fintech was the largest large-cap decliner, falling 1.97%, weighed down by profit booking and cautious sentiment ahead of earnings. Emcure Pharma slipped 1.98% among mid caps, while Privi Speciality Chemicals plunged 11.61%, reflecting profit-taking and sector-specific headwinds.

Within the broader BSE500 index, Graphite India led the gainers with a 9.24% jump, followed by Zydus Wellness (+7.69%) and MRPL (+7.49%). On the losing side, Vodafone Idea tumbled 10.85%, Embassy Developments dropped 4.99%, and Navin Fluorine International declined 3.40%, highlighting pockets of weakness amid the broader market strength.

Market Capitalisation Segments and Breadth

The small-cap segment demonstrated notable strength, rising 1.19%, outpacing mid caps and large caps. Mid caps gained 1.01%, while the BSE100 index, representing large caps, rose 0.76%. This performance spread indicates a healthy risk appetite among investors, favouring growth-oriented smaller companies while maintaining exposure to blue chips.

Foreign Institutional and Domestic Institutional Activity

Foreign Institutional Investors (FIIs) remained net buyers, continuing their recent trend of capital inflows into Indian equities, buoyed by positive global cues and improving domestic macroeconomic indicators. Domestic Institutional Investors (DIIs) also participated actively, supporting the market with steady purchases, particularly in mid and small-cap stocks.

Global Cues and Outlook

Global markets closed mixed ahead of the New Year, with US indices showing modest gains while Asian markets were subdued. Crude oil prices firmed up, supporting the rally in the Oil & Gas sector domestically. Investors remain cautious ahead of key economic data releases and corporate earnings scheduled in early January 2026.

Upcoming Corporate Earnings to Watch

Market participants are closely monitoring upcoming quarterly results, including Corona Remedies scheduled for 02 Jan 2026 and Canara Robeco on 20 Jan 2026. These earnings reports are expected to provide further direction to sectoral and stock-specific trends in the near term.

Conclusion: Positive Momentum with Selective Caution

Indian equity markets closed 2025 on a positive note, supported by broad sectoral gains, strong market breadth, and healthy participation across market capitalisation segments. The Oil & Gas sector’s leadership and small-cap outperformance highlight investor optimism in cyclical and growth themes. However, pockets of weakness in telecom and select mid and small caps warrant selective stock picking.

With the Nifty trading near its 52-week highs and technical indicators signalling strength, investors should remain vigilant of upcoming earnings and global developments. The current environment favours a balanced approach, combining exposure to resilient large caps with growth-oriented mid and small caps to capitalise on the evolving market dynamics.

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