Mumbai-based benchmarks opened the first trading session of 2026 with modest gains as domestic investors provided the primary support while most global markets were closed for the New Year holiday.
The Nifty 50 rose to 26,173.30 at the open, up 43.70 points or 0.17 per cent, while the BSE Sensex started at 85,255.55, higher by 34.95 points or 0.04 per cent. Market participants said trading volumes were likely to remain low in the absence of international cues, keeping the session relatively muted.
Indian markets show steady start to the year
Market breadth was positive in early trade, with the Nifty 100 up 0.18 per cent, the Nifty Midcap 100 gaining 0.23 per cent and the Nifty Smallcap 100 rising 0.18 per cent. Sectoral indices on the National Stock Exchange were mostly higher. The Nifty Auto index advanced 0.24 per cent, Nifty Media climbed 0.19 per cent and Nifty Consumer Durable rose 0.24 per cent. Nifty IT, PSU Bank and Pharma also traded with modest gains.
Ajay Bagga, a banking and market expert, told ANI that short covering had influenced markets on the last trading day of calendar year 2025. He noted that foreign portfolio investors (FPIs) remained net sellers in the cash market, while domestic institutional investors (DIIs) recorded inflows for a record 87th successive day.
Bagga added that FPI positioning was substantially short, which may limit upside in the near term. He said: “Gift Nifty is indicating a positive open. Volumes will be low with most global markets on holiday.”
Looking beyond the opening session, sentiment toward 2026 remained constructive. Analysts expect stimulus measures in key economies to lend support to corporate earnings next year. Anticipated tax relief in the United States, and possible stimulus efforts in Japan, China and parts of Europe, were cited as potential tailwinds.
Nevertheless, market watchers cautioned that several headwinds persist. Valuations in some pockets remain stretched after strong gains through 2025, and geopolitical tensions — including flashpoints in the Taiwan Strait and the Russia-Ukraine conflict — continue to pose tail risks. Those factors could prompt sharper moves if fresh negative news emerges.
Global context was subdued as most major exchanges were shut for the New Year. On the last trading day of 2025, US markets closed lower; the S&P 500 slid on the day but finished the year with gains of around 16 per cent, buoyed by continued optimism around artificial-intelligence related demand. The Dow Jones and Nasdaq also delivered double-digit returns for the year.
With limited global participation and steady domestic support, analysts said Indian markets were likely to trade in a range during the holiday-affected session. Investors will monitor volumes, FPI flows and any early policy signals from major economies to gauge momentum for the weeks ahead.
Key Takeaways:
- Indian markets opened 2026 with marginal gains as domestic investors supported Nifty and Sensex amid global holiday thinness.
- Domestic institutional inflows continued for a record 87th day while FPIs remained net sellers with a heavily short position.
- Broader indices and sectoral indices traded higher, led by autos, media and consumer durables.
- Outlook for 2026 is cautiously optimistic with expected global stimulus but risks from stretched valuations and geopolitical tensions.
