CHENNAI: Indian equity markets opened the first trading session of the New Year on a firm footing on Friday, January 2, with benchmark indices extending early gains in morning trade amid positive global cues and selective buying in cyclical stocks. Sentiment was cautiously optimistic as investors returned from the holiday break, though participation remained measured with traders keeping a close watch on foreign fund flows and sector-specific developments.
The BSE Sensex traded higher in the opening hours, gaining modestly as heavyweight stocks provided support, while the NSE Nifty held above the 26,150 mark, signalling a positive bias at the start of the session. The advance came after a steady pre-open session, reflecting improved risk appetite at the start of the calendar year. However, gains were largely incremental rather than broad-based, suggesting that investors were avoiding aggressive positioning.
At 10:45 am, the Sensex was up 338 points at 85,527, while the Nifty 50 gained 115 points to trade at 26,261.
Autos emerged as one of the key drivers in morning trade, supported by optimism around December sales trends and expectations of stable demand conditions. Select metal stocks also saw buying interest, tracking firm global commodity prices and hopes of sustained infrastructure-led demand. Banking and financial stocks traded with a mild upward bias, aided by expectations of healthy credit growth, although private lenders remained largely range-bound.
On the other hand, FMCG stocks showed weakness, with selling pressure in select large-cap names weighing on the sector. Concerns around potential policy and tax-related headwinds kept investors cautious, preventing the benchmarks from posting sharper gains despite strength in other pockets of the market. Information technology stocks were mixed, reflecting muted global tech cues and a lack of fresh triggers in early trade.
Market breadth was marginally positive, indicating selective stock-specific action rather than a strong directional move across the board. Mid-cap and small-cap stocks traded with caution after recent volatility, as investors continued to prefer relative safety in large-cap names at the start of the year.
The equity markets began the second trading session of 2026 on a cautiously positive and stable note, say market analysts.
"As international markets reopen gradually, overseas cues remain limited, keeping early trade largely driven by domestic factors. With the Q3 earnings season approaching, investors are positioning for resilient results in consumer-oriented sectors, underpinned by GST rationalisation tailwinds and robust festive-season demand. Steady domestic institutional inflows continue to provide broader support, helping offset aggressive selling by foreign investors," says R Ponmudi, CEO at brokerage Enrich Money.
From a broader perspective, global cues were supportive, with Asian markets trading mostly higher in early sessions and optimism building around economic stability in major economies. However, domestic sentiment continued to be tempered by concerns over foreign portfolio investor outflows seen toward the end of December, which traders believe could cap near-term upside unless flows stabilise.
Technically, the Nifty appeared to be consolidating in a narrow range, with immediate support seen around the 26,100 zone and resistance near the 26,200–26,250 levels. A decisive move above this resistance band could open the door for fresh momentum buying, while failure to hold key support levels may invite profit booking as the day progresses.
Investors are selectively positioning themselves in sectors showing earnings visibility while remaining alert to global developments and flow-driven volatility. The near-term trend is expected to remain range-bound, with market direction likely to be influenced by sector-specific news and cues from global markets as the session unfolds.