India’s equity markets kicked off calendar year (CY) 2025 on a positive note as the benchmark indices – BSE Sensex and NSE Nifty - ended higher on Wednesday (January 1). The Sensex gained 368.40 points or 0.47% to settle at 78,507.41 and the Nifty surged 98.10 points or 0.41% to close at 23,742.90.
The broader market, especially the Nifty Smallcap 100, outpaced the benchmark Nifty50, settling positively with gains of around 1%. Sector-wise, Nifty Auto rose by more than 1.3%, while the Realty index saw a correction of 1.1%.
"The sustainability of the trend will depend on the earnings growth in Q3, where the expectation is positive on a Q-o-Q (quarter on quarter) basis. An uptick in core sector data and prospect of ramp-up in capex spending by the government in the remaining part of the fiscal aided sectors like capital goods, industrials, auto, and power,” said Vinod Nair, Head of Research, Geojit Financial Services.
In the Nifty50 pack, Maruti Suzuki, M&M, Bajaj Finance, L&T, and Eicher Motors were among the top gainers. The top laggards were Dr Reddy's Labs, Hindalco Industries, Adani Ports, ONGC and Tata Steel. While the index recovered, FII selling remains a concern for the market. Foreign institutional investors (FIIs) sold (net sales) shares worth Rs 1,782.71 crore on Wednesday.
Vaibhav Agrawal, CIO – Alternates (Public equity), MOAMC, said that while the FII flows remain volatile, a pickup in corporate earnings in 2HFY25 and expected easing in geopolitical tensions post Trump joining office, could turn higher foreign flows into Indian equities vs other emerging economies (grappling with slowdown).
“With global liquidity tightening starting to ease, continued strength in domestic and retail participation, consumption growth likely having bottomed out, political continuity, government spending to be better in the second half of current financial year (2HFY25) and valuation correction from highs, here is a reasonable likelihood that the markets could be well-positioned for CY25,” added Agrawal.
He warned that making money in 2025 will not be as easy and broad-based as it has been in the last 4 years.