Nifty Hits Record High Above 26,300; Sensex Gains 573 Points

Indian Markets Scale New Peaks

Indian equity benchmarks concluded the trading session on January 2 at unprecedented highs, extending their gains for the second consecutive week. The Nifty 50 index not only closed at a record level but also registered a new all-time intraday high of 26,340. Similarly, the BSE Sensex surged, reflecting strong investor sentiment supported by stable domestic macroeconomic fundamentals.

At the closing bell, the Sensex was up 573.41 points, or 0.67%, settling at 85,762.01. The Nifty 50 advanced by 182 points, or 0.70%, to close at 26,328.55. The positive momentum was widespread, with market breadth firmly in favour of advancers. Approximately 2,527 shares advanced, while 1,347 shares declined, and 135 remained unchanged.

Broad-Based Rally Lifts Most Sectors

The rally was not confined to the main indices. Broader markets also demonstrated significant strength, outperforming the benchmarks. The Nifty Midcap index gained 1%, hitting a new high, while the Nifty Smallcap index rose by 0.7%. This indicates robust participation from across the market spectrum.

Sectoral performance was overwhelmingly positive. All major sectoral indices ended in the green, with the exception of the Nifty FMCG index, which fell by approximately 1.19%. The top-performing sectors included Nifty Auto, Metal, Capital Goods, Media, Realty, Consumer Durables, Power, and PSU Bank, all of which gained between 1% and 2%. The Nifty Bank index also achieved a new record intraday high of 60,203.75 before closing at 60,150.95, a gain of 0.74%.

Top Stock Performers and Laggards

Several individual stocks were in focus due to corporate developments and market momentum. Nearly 180 stocks, including Coal India, Hindalco Industries, TVS Motor Company, and Bank of Baroda, touched their 52-week highs.

The top gainers on the Nifty 50 were led by Coal India, which surged 6.85%. Other significant gainers included NTPC, Hindalco, Trent, and Jio Financial.

On the other hand, the primary laggard was ITC, which fell nearly 4% after Morgan Stanley downgraded the stock to ‘equal-weight’. Other losers included Nestle, Axis Bank, Kotak Mahindra Bank, and Shriram Finance.

Technical Outlook: Experts See Further Upside

Market analysts maintain a bullish outlook for the near term, citing strong technical indicators. The recent price action suggests a continuation of the upward trend.

Rupak De, Senior Technical Analyst at LKP Securities, noted that the Nifty has broken above its previous swing high, reinforcing a positive bias. "The bullish crossover of the 20 EMA and 50 EMA further strengthens the upward structure," he stated. De suggests a "buy-on-dips" approach as long as the index holds above the 26,000 level. He sees a potential move towards 26,600 if the index decisively crosses the 26,350 mark.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, echoed this sentiment. He pointed to the formation of a "long bull candle" on the daily chart, indicating a decisive breakout from a recent consolidation phase. "The underlying trend of Nifty is sharply up," Shetti commented. He has identified the next upside target for the coming weeks at around 26,750, based on Fibonacci extension levels, with immediate support placed at 26,200.

Market Drivers and Conclusion

The sustained rally is attributed to continued confidence in India's medium-term growth trajectory and positive cues from encouraging auto sales numbers for December. The auto sector, in particular, gained traction, with companies like TVS Motor and Hero MotoCorp reporting better sales data.

In conclusion, the Indian stock market has started the year on a strong footing, with key indices breaking psychological barriers and setting new records. The technical setup appears robust, and expert analysis points towards continued upward momentum in the short term, provided key support levels are maintained. Investors will now look ahead to the upcoming earnings season for further direction.