The Indian equity benchmarks concluded the week on a high note, achieving fresh all-time highs driven by robust performance in the banking and auto sectors. Nifty surged by 1.05% throughout the week and by 0.70% on the last trading day, reaching 26,328, while Sensex closed up by 760 points or 0.67% at 85,762, with a weekly surge of 0.89%.
Bank Nifty also excelled, hitting new record highs above 60,200. The market initially traded cautiously until New Year due to FII outflows and global uncertainties. However, on New Year, the indices closed flat, and by the end of the trading week, they marked fresh all-time highs.
Strong momentum was witnessed in the auto and PSU banking sectors, with utilities showing gains on expectations of increased demand and industrial activity. The robust December auto sales hint at a broader economic upturn during the festive quarter.
Investor interest in PSU banking stocks increased due to improving asset quality and expectations of accelerated credit growth. Conversely, the FMCG index dipped by 4% for the week following the government’s announcement of higher excise duty on cigarettes.
Broader indices outperformed the benchmarks, with Nifty Midcap100 rising by 1.74% and Nifty Smallcap100 by 0.77%. Precious metals sustained their momentum amid trade disparities, supply constraints, geopolitical tensions, rate cut expectations, and FII outflows, testing investors’ risk appetite.
Analysts suggest that Nifty’s sustained hold above 26,300 could drive a rally towards 26,500, potentially reaching 26,700 with strong follow-through. In the near term, Bank Nifty is expected to outperform the Nifty index. Key factors for investors include US payroll and unemployment data, earnings triggers, and clarity on the India-US trade deal.
