Sensex Jumps 638 Points in Year-End Rally; Nifty Tops 26,172

Introduction to the Market Rally

Indian equity markets began the week on a strong footing, with benchmark indices Sensex and Nifty 50 extending their gains from the previous session. On Monday, December 22, 2025, the BSE Sensex surged 638.12 points, or 0.75%, to close at 85,567.48. Similarly, the NSE Nifty 50 climbed 206 points, or 0.79%, to settle at 26,172.40. The rally was broad-based, fueled by robust buying in information technology (IT) and metal stocks, positive global sentiment, and renewed foreign fund inflows.

Detailed Market Performance

The trading session was characterized by sustained buying interest. After a gap-up opening, the Nifty maintained its momentum throughout the day, closing near its session high. The positive sentiment was not limited to large-cap stocks; broader markets also participated enthusiastically. The Nifty MidCap 100 index gained 0.84%, while the Nifty SmallCap 100 index soared by 1.17%, indicating healthy risk appetite among investors. Market breadth was strong, with approximately 2,601 shares advancing on the NSE, while 1,363 declined.

Sectoral Spotlight: IT and Metals Lead the Charge

Sectoral performance was overwhelmingly positive, with most indices ending in the green. The Nifty IT index was the standout performer, surging 2.06%. This rally was driven by optimism around potential rate cuts by the US Federal Reserve and a strong performance by Infosys ADRs. Key IT stocks like Infosys, Wipro, and Tech Mahindra were among the top gainers. The Nifty Metal index also posted a significant gain of 1.41%, supported by rising global commodity prices. In contrast, the Nifty Consumer Durables index was the only sectoral loser, ending the day with a marginal decline of 0.16%.

Key Drivers Behind the Market Surge

Several factors contributed to the market's upward momentum. Favourable global cues played a significant role, as expectations of monetary policy easing by the US Federal Reserve in 2026 boosted investor confidence worldwide. This sentiment was echoed in Asian markets, with major indices in Japan and South Korea closing with gains of nearly 2%.

Domestically, the stabilization of the Indian rupee provided a major boost. After hitting a record low of 91 against the US dollar, the currency strengthened to around 89.60, aided by likely intervention from the Reserve Bank of India (RBI). This currency stability encouraged foreign institutional investors (FIIs) to return to the Indian market. Data showed FIIs turning net buyers, which reinforced the positive market tone. Additionally, optimism surrounding the finalization of the India-New Zealand Free Trade Agreement (FTA) further lifted investor sentiment.

Top Movers and Shakers

On the Nifty 50, Trent, Shriram Finance, and Wipro were the top gainers. Trent shares rose by approximately 3.9%, continuing their strong momentum. On the BSE, Trent, Infosys, and Bharti Airtel led the pack of gainers. Conversely, some banking and consumer stocks faced selling pressure. State Bank of India (SBI), Kotak Mahindra Bank, HDFC Life, and Tata Consumer Products were among the top laggards on the benchmark indices.

Technical Outlook and Expert Views

Technical analysts noted that the Nifty 50 confirmed a breakout above the critical 26,050–26,100 resistance zone, validating a double-bottom pattern. According to Rupak De, Senior Technical Analyst at LKP Securities, the trend is likely to remain bullish as long as the index holds above the 25,900 support level. The next immediate resistance is seen at 26,315, with a potential rally towards the 26,300–26,500 range if that level is breached.

Market experts shared a positive outlook. Vinod Nair, Head of Research at Geojit Investments, stated that Indian markets extended their year-end rally, supported by strong liquidity and global cues. He highlighted that FIIs turning net buyers reinforced the positive tone, with IT and metals leading the gains.

Stock-Specific Developments

Several individual stocks were in focus due to corporate announcements. Kinetic Engineering shares surged nearly 15% after its subsidiary partnered with JioThings for its electric two-wheelers. Hindustan Construction Company (HCC) saw its stock rise over 11% following a major order win. KEC International also jumped over 7% after the Delhi High Court stayed a bidding ban imposed by Power Grid.

Conclusion and Forward Outlook

The market's strong performance on Monday has set a positive tone for the final trading week of 2025. The combination of supportive global factors, a stable currency, and renewed FII interest suggests that the upward momentum could continue. Investors will now look ahead to upcoming macroeconomic data, including the Q3 GDP estimate, for further policy clarity. While the overall sentiment remains bullish, caution is advised due to geopolitical uncertainties and volatility in crude oil prices. The key for the market will be to sustain its position above crucial support levels to continue its year-end rally.