Overall, the market’s upward trajectory reflects robust liquidity, improving global sentiment, and broad-based sectoral participation, though rising volatility suggests investors remain selectively cautious. The near-term outlook remains constructive, with defence, IT, and metals likely to stay in focus, while macro data and geopolitical developments will shape the next leg of the rally.
BIZ DESK
The domestic equity market closed firmly higher on Monday, extending its year-end rally for the second consecutive session, supported by strong liquidity conditions, improving global cues, and expectations of further US Federal Reserve easing in 2026. These factors collectively enhanced risk appetite, despite lingering macro and geopolitical uncertainties.
A key positive driver was the return of Foreign Institutional Investors (FIIs) as net buyers, which reinforced upward momentum across frontline and broader indices. According to Vinod Nair, Head of Research at Geojit Investments, optimism around global monetary easing, particularly in the US, has strengthened investor confidence, though caution persists due to geopolitical tensions, delays in trade negotiations, and volatility in crude oil prices.
Adding to the risk-on sentiment, gold prices touched a record high, driven by expectations of rate cuts, sustained central bank purchases, steady ETF inflows, and heightened geopolitical tensions—most notably Ukraine’s reported strike on a Russian vessel.
Index Performance
- BSE Sensex rose 638.12 points (0.75%) to close at 85,567.48, after touching an intraday high of 85,601.33
- Nifty 50 gained 206 points (0.79%) to end at 26,172.40, near the day’s peak of 26,180.70
Despite the rally, market volatility edged higher, with India VIX rising 9.6%, indicating that investors remain alert to near-term risks even as equities advance.
Trading activity also picked up, with NSE cash market turnover rising 5% above the 10-day average, signalling increased market participation, noted Nandish Shah of HDFC Securities.
Broader Market and Technical View
The broader market continued to outperform, with:
- Nifty Midcap 100 up 0.84%
- Nifty Smallcap Index gaining 1.17%
Technically, Nifty’s trend remains positive. According to Sudeep Shah of SBI Securities, the index is likely to extend its northward movement over the next few sessions, provided global cues remain supportive.
Bank Nifty ended in the green but underperformed the frontline indices, reflecting selective pressure in banking heavyweights.
Sector-Wise Performance Snapshot
| Sector / Index | Performance | Key Drivers |
|---|---|---|
| Defence | ▲ 3%+ (Top Performer) | Strong order visibility, strategic importance, PSU buying |
| IT | ▲ 2%+ | Fed rate-cut optimism, sharp rise in Infosys ADRs |
| Metals | ▲ Positive | Dollar softness, global growth expectations |
| Chemicals | ▲ Positive | Broad-based buying, valuation comfort |
| Telecom | ▲ Positive | Stock-specific momentum (Bharti Airtel) |
| Banking | ▲ Mild gains | Mixed performance among large private & PSU banks |
| Pharma | ▲ Marginal / Mixed | Stock-specific weakness |
| Consumer Durables | ▼ Only sector in red | Profit-taking, valuation concerns |
Stock-Specific Highlights
- Top Nifty 50 Gainers: Trent, Shriram Finance, Wipro, Infosys, Bharti Airtel
- Top Nifty 50 Losers: Tata Consumer Products, SBI, Kotak Mahindra Bank, Cipla, Grasim Industries
Defence Stocks Rally
Defence counters outperformed sharply, with Cochin Shipyard, Solar Industries, GRSE, Mazagon Dock, MTAR Tech, and BEML surging 5–8%, driven by strong order expectations and continued policy support.
IT Stocks Lead Frontline Gains
Within IT, Persistent Systems, Wipro, Infosys, Tech Mahindra, and HCL Technologies gained 1–3%, supported by optimism around US rate cuts and strong overseas cues.
Market Breadth & Outlook
Market breadth remained decisively positive:
- Advances: 2,794
- Declines: 1,515
- Unchanged: 192
(out of 4,501 BSE-traded stocks)
Looking ahead, analysts expect year-end momentum to hinge on currency movements, FII flows, and global central bank signals, according to Gaurav Garg of Lemonn Markets Desk.
On the macro front, investors will closely monitor UK Q3 GDP data, followed by US Q3 GDP and Consumer Confidence figures, which may provide further cues on global growth and monetary policy direction.
Overall, the market’s upward trajectory reflects robust liquidity, improving global sentiment, and broad-based sectoral participation, though rising volatility suggests investors remain selectively cautious. The near-term outlook remains constructive, with defence, IT, and metals likely to stay in focus, while macro data and geopolitical developments will shape the next leg of the rally.