Indian equity Markets benchmarks closed largely unchanged on the first day of 2026, reflecting a cautious but resilient market mood. While headline indices struggled to gain momentum, strength in banking, auto, and midcap stocks helped offset weakness from select heavyweights, allowing the Nifty to defend crucial levels.
The session highlighted a market that remains selective, with investors rotating capital toward pockets showing earnings visibility and volume growth.
Benchmark Performance: Flat Close with Underlying Support
The Sensex edged lower by 32 points to finish at 85,189, while the Nifty added 17 points, settling at 26,147. Despite the modest movement, the Nifty’s ability to remain above the 26,100 mark was seen as a positive technical signal.
Banking stocks provided stability, with the Nifty Bank index gaining 130 points to close at 59,712. Broader markets outperformed the benchmarks, as midcap stocks extended their strength, lifting the midcap index by 266 points to 60,750. Market breadth remained favourable, with advances outnumbering declines.
ITC Drag Limits Upside After Excise Duty Hike
A sharp decline in ITC weighed on overall market sentiment. The stock fell nearly 9% following the government’s decision to raise excise duty, making it the single largest drag on the Nifty during the session.
The decline in ITC capped broader gains, even as several other sectors traded with a positive bias.
Auto and Financial Stocks Lead Gains
Auto and financial stocks emerged as key gainers, driven by optimism around demand trends and upcoming data releases. Shriram Finance topped the Nifty leaderboard with a 3% rise, while Bajaj Auto gained a similar amount ahead of its monthly sales numbers.
Other auto names such as Mahindra & Mahindra and Ashok Leyland also advanced after reporting encouraging December sales volumes, reinforcing confidence in the sector’s near-term outlook.
Midcap Stocks Show Continued Strength
The midcap segment once again outperformed, reflecting sustained investor interest beyond large-cap names. Stocks such as JSW Energy, PNB Housing Finance, Astral, and Supreme Industries posted gains of 3–4%.
APL Apollo Tubes climbed 3% after announcing strong volume growth for the third quarter, adding to the positive momentum in industrial and infrastructure-linked names.
Select Stocks Face Selling Pressure
On the downside, Avenue Supermarts slipped around 2% ahead of its quarterly business update, as investors remained cautious on near-term margins.
PB Fintech also declined after concerns emerged around higher insurance commissions flagged by the Reserve Bank of India. Meanwhile, MCX ended about 1% lower, largely due to profit booking after recent gains.
Market Outlook: Stability with Stock-Specific Action
The first session of 2026 suggests that markets are entering the new year with measured optimism rather than broad-based enthusiasm. While headline indices may remain range-bound in the near term, continued strength in banks, autos, and midcaps indicates that investors are actively seeking opportunities at the stock level.
Sustaining key support levels and earnings-driven moves are likely to shape market direction in the sessions ahead.
