Sensex Edges Up, Nifty Crosses 23,800 Amid Gains in Auto and Banking Stocks

Benchmark indices Nifty and Sensex continued their upward momentum for a second consecutive day on January 2, driven by gains in the auto, IT, and banking sectors. However, metal and real estate stocks began the session on a weaker note.

As of 11 a.m., the Sensex had risen by 603.71 points (0.77%) to reach 79,111.12, while the Nifty gained 187.85 points (0.79%), trading at 23,930.75. Market breadth showed 1,943 stocks advancing, 1,337 declining, and 95 remaining unchanged.

The IT index climbed 1% after CLSA and Citi projected improved revenue growth for the sector in the December quarter and in 2025. Analysts Sumeet Jain and Shubham Agrawal from CLSA cited positive factors such as stable demand, improved client sentiment post-US elections, and the rupee's sharp depreciation against the dollar as potential drivers of IT earnings growth.

Aishvarya Dadheech, Founder and CIO of Fident Asset Management, highlighted that market volatility is likely to persist, with the upcoming Q3 earnings and potential shifts in U.S. policies under President Donald Trump shaping market sentiment. He noted that strong macroeconomic indicators, reasonable valuations, and stabilizing foreign inflows could support the market, though near-term risks include rupee depreciation and potential earnings misses. Dadheech anticipates foreign institutional investors (FIIs) could resume buying in March or April if corporate earnings remain resilient.

FIIs sold equities worth ₹1,782 crore on January 1, 2025, extending their selling streak, while domestic institutional investors purchased equities worth ₹1,690 crore on the same day.

In today’s trade, the Nifty Auto index outperformed, rallying 1.5% as Tata Motors, M&M, and Maruti Suzuki posted strong gains on better-than-expected December sales data. The FMCG and Infra indices also rose by approximately 0.5%.

Conversely, the Nifty PSU Bank index, led by SBI, Bank of India, and Bank of Baroda, declined 1%. Other lagging sectors included Pharma and Realty.

Midcap and small-cap stocks traded relatively flat, but Dadheech expressed optimism about their performance, particularly in pharmaceuticals, real estate, and healthcare sectors, citing stronger earnings growth potential.

Among individual stocks:

Tata Motors rose over 1% after reporting a marginal 1% year-on-year increase in domestic sales for December, with passenger vehicle sales, including EVs, up 1%. However, commercial vehicle sales fell by 1%.

Wipro shares slipped as CLSA downgraded the stock to 'hold' following its recent rally, citing flat constant currency QoQ growth in Q3.

M&M extended gains after Citi reaffirmed its 'buy' rating, pointing to strong utility vehicle volumes and a 22% year-on-year growth in tractor sales. A promising harvest season is expected to further support growth.

Akshay Chinchalkar, Head of Research at Axis Securities, commented on technical levels for the Nifty, noting resistance between 23,876 and 23,970, coinciding with the 200-DMA. He identified short-term support in the 23,545–23,640 range, with a further downside limit at 23,460. He emphasized that the market remains weak unless bulls manage to close above 24,150.

Top Nifty gainers included Bajaj Finance, Bajaj Finserv, M&M, Maruti Suzuki, and Infosys, while Britannia Industries, Sun Pharma, BPCL, NTPC, and BEL were the key laggards.