Sensex and Nifty: Steady Climb Amidst Mixed Sentiment

After opening 118.50 points higher, the Sensex maintained its upward trajectory throughout the day, closing just 1.6% shy of its 52-week peak of 86,159.02. The index’s position above its 50-day moving average (DMA), which itself is comfortably above the 200 DMA, underscores a technically bullish setup. The Nifty mirrored this trend, buoyed by select sectoral performances and resilient large-cap stocks.

Large caps traded largely flat, reflecting a cautious stance among institutional investors. However, the market’s momentum was bolstered by mid and small caps, which outperformed their larger counterparts. The BSE Small Cap index rose 0.5%, while the Mid Cap index gained 0.24%, signalling a broad-based rally beyond the headline stocks.

Sectoral Performance: Metals Shine, IT Faces Pressure

Out of 38 sectors tracked on the BSE, 35 advanced while only three declined, highlighting widespread buying interest. The metal sector led the charge with a 1.26% gain, driven by robust performances from key constituents. JSW Steel emerged as the top large-cap gainer, surging 4.75% on the back of positive demand outlook and favourable commodity prices.

Conversely, the BSE IT sector was the sole notable laggard, slipping 0.25% amid profit-booking and cautious global technology spending forecasts. This sectoral divergence reflects investors’ rotation into cyclical and commodity-linked stocks as year-end approaches.

Top Gainers and Losers: Mixed Fortunes Across Market Caps

Among mid caps, Punjab & Sind Bank led gains with a 3.37% rise, while Dynacons Systems topped the small-cap charts with an impressive 12.92% jump, signalling renewed investor interest in select small-cap opportunities. On the downside, PB Fintech was the largest decliner among both large and mid caps, falling 2.43%, weighed down by profit-taking and sector-specific concerns. Privi Speciality Chemicals was the worst performer in the small-cap space, plunging 11.40% amid weak earnings expectations.

Within the broader BSE500 universe, Zydus Wellness (+8.58%), HFCL (+8.22%), and IFCI (+6.84%) were among the top gainers, reflecting strong sectoral tailwinds and company-specific catalysts. Meanwhile, Asahi India Glass (-3.79%), Aditya AMC (-2.96%), and Navin Fluorine International (-2.61%) faced selling pressure, highlighting selective profit-booking in certain pockets.

Market Breadth and Capitalisation Trends

The advance-decline ratio across the BSE500 stood at a healthy 351 advances to 149 declines, translating to a 2.36x ratio, which confirms the broad-based nature of the rally. This breadth is a positive indicator of market health, suggesting that gains were not confined to a handful of stocks but were widespread across sectors and market capitalisations.

In terms of capitalisation segments, small caps led with a 0.5% gain, followed by mid caps at 0.24% and the BSE100 index rising 0.23%. This pattern indicates a rotation towards smaller and mid-sized companies, often seen as higher growth opportunities, especially as large caps consolidate.

Foreign and Domestic Institutional Activity

Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) remained active participants, though their net activity was mixed. While FIIs showed cautious buying in select sectors such as metals and financials, DIIs continued to support the market by accumulating quality mid and small caps. This balanced institutional participation helped maintain market stability amid global uncertainties.

Global Cues and Outlook

Global markets closed mixed ahead of the New Year, with US indices showing modest gains while Asian markets were subdued. Concerns over inflation and central bank policies continue to influence investor sentiment worldwide. However, the Indian market’s resilience is notable, supported by strong domestic fundamentals and improving corporate earnings visibility.

Looking ahead, investors will closely monitor upcoming quarterly results, including Corona Remedies scheduled for 02 Jan 2026 and Canara Robeco on 20 Jan 2026, which could provide further directional cues. The market’s technical setup remains constructive, with the Sensex comfortably above key moving averages, suggesting potential for further upside in the near term.

Conclusion: Cautious Optimism as Market Nears Key Milestones

The Indian equity market closed 2025 on a positive note, with the Sensex edging higher and maintaining a strong technical posture. Broad sectoral participation, led by metals, and robust market breadth underpin the market’s resilience. While IT and select small caps faced headwinds, the overall sentiment remains constructive.

Institutional activity continues to be balanced, and global uncertainties have so far not derailed domestic momentum. Investors should remain watchful of upcoming earnings and global developments but can take comfort from the market’s ability to sustain gains near record levels.

As the new year approaches, the market’s focus will likely shift towards earnings growth, policy clarity, and global macroeconomic trends, which will shape the trajectory of Indian equities in 2026.

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