The Indian equity market extended its gains on Friday with the benchmark NSE Nifty 50 surging 193.45 points or 0.73% in intraday deals to reach an all-time peak of 26,340. The 50-share index settled 182 points or 0.7% higher at 26,328.55. The other benchmark, BSE Sensex, climbed 573.41 points, or 0.67%, to close at 85,762.01. During the day, it jumped 623.67 points or 0.73% to 85,812.27, just shy of its all-time high of 86,159.
The buying on Friday was supported by positive sector-specific developments, particularly the strong auto sales trend in December and the expectation of a robust Q3 earnings season. Global markets also remained firm but the rupee traded weak by 0.20-0.22% near 90.16 against the dollar.
Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services, said that expectations around the upcoming Q3 results and supportive policy measures in the Union Budget have helped lift overall sentiment. A key factor has been improved participation in the broader market, particularly selective buying in mid-cap stocks.
“We expect this positivity to continue into next week, supported by several companies announcing their pre-quarterly business updates…Overall, markets are expected to remain firm, with investor focus on pre-quarterly business updates and the onset of the Q3 earnings season,” added Khemka.
Broader markets also participated in the rally of Friday as the Nifty Midcap 100 gained 1% and the Nifty Smallcap 100 advanced 0.7%. Sectoral performance was largely positive. Nifty Realty, Nifty PSU Bank and Nifty Metal led the gains, each rising around 1.5%. Automobile stocks remained in focus, with the Nifty Auto index up 1.1%, supported by strong December sales numbers reported by companies.
Banking stocks witnessed strong buying interest following positive December quarter business updates, lifting the Bank Nifty to a fresh record high of 60,152.35 during the session.
"Nifty has started the year on a firm footing, scaling fresh lifetime highs above 26,340 and reaffirming its broader uptrend,” said Ashish Chaturmohta, Managing Director & Fund Manager, Apex PMS, JM Financial. However, the gains are not broad-based, he noted.
Chaturmohta said that December data show that nearly 58% of NSE 500 stocks ended the month lower, while over half of Nifty constituents underperformed the index—highlighting narrow, large-cap-led leadership rather than broad-based strength.
“This divergence suggests that gains remain concentrated in a few heavyweights, with much of the market yet to participate. If Nifty sustains current levels and market breadth improves, a broader participation phase could emerge, making the next leg of the bull market stronger and more sustainable,” he added.
He stated that fundamentally, the rally is supported by improving corporate earnings and macro stability. GST cuts aiding demand, a lower interest-rate environment, positive rural sentiment, and steady domestic institutional support reinforce the underlying strength, while any positive resolution on the US trade front could further influence foreign investor sentiment, said Chaturmohta.
Ajit Mishra – SVP, Research, Religare Broking, said that as anticipated, the Nifty has decisively crossed the 26,200 mark and moved to a fresh record high.
“The prevailing trend remains positive, with the index now poised to gradually test the 26,500–26,700 zone in the near term. With broad sectoral participation excluding FMCG, participants are advised to focus on stock selection based on relative sector strength and favourable risk–reward opportunities,” added Mishra.