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Nifty Soars to Record Highs as Banking and Auto Stocks Lead the Rally

Indian equity benchmarks closed the week at fresh all-time highs, with Nifty gaining 1.05% driven by robust performances in banking and auto stocks. Strong December auto sales and improving asset quality in PSU banks fueled investor optimism, while broader indices like Midcap and Smallcap also posted gains. Analysts suggest that if Nifty sustains above 26,300, the rally could extend toward 26,500-26,700 levels. Key upcoming cues include US payroll data and clarity on the India-US trade deal, which may influence market direction in the near term.

Key Points: Nifty Hits All-Time High, Led by Banking & Auto Stocks

  • Nifty surges 1.05% to record high
  • Banking and auto sectors lead gains
  • Broader indices outperform benchmarks
  • Analysts eye 26,500-26,700 levels
2 min read

Nifty surges over 1 pc this week led by bank, auto stocks

Nifty surged over 1% this week, reaching a record high driven by strong performance in banking and auto sectors. Get key insights and analysis.

Nifty surges over 1 pc this week led by bank, auto stocks
"A sustained hold by Nifty above 26,300 could accelerate the rally toward 26,500. - Analysts"

Mumbai, Jan 3

The Indian equity benchmarks closed on a strong note this week, touching fresh all-time highs amid strong performance in the banking and auto sectors.

Nifty surged 1.05 per cent during the week and 0.70 per cent on the last trading day to 26,328. At close, Sensex was up 760 points or 0.67 per cent at 85,762. It surged 0.89 per cent during the week.

Bank Nifty also continued its outperformance and scaled fresh record highs above the 60,200 mark.

The Indian equities traded in a cautious tone till New Year, weighed down by persistent FII outflows and heightened global uncertainties. On New Year, the indices ended on a flat note, and on the last day of trading week, they touched fresh all-time highs.

Strong momentum was observed in the auto and PSU banking sectors, while sectoral rotation was evident in utilities as they gained traction on hopes of rising demand and increased industrial activity. Robust December auto sales indicate a broader uptick in economic activity during the festive-driven quarter.

Improving asset quality and expectations of accelerated credit growth drew investor interest toward PSU banking stocks, analysts said.

Conversely, FMCG index dipped 4 per cent for the week after the government announced a higher excise duty on cigarettes.

Broader indices outperformed benchmark indices for the week, with the Nifty Midcap100 up 1.74 per cent, while Nifty Smallcap100 edged up 0.77 per cent.

Precious metals continued their momentum, as trade disparity, supply constraints, geo-political tension, rate cut view and FII outflows continue to test the near-term risk appetite of investors.

According to analysts, a sustained hold by Nifty above 26,300 could accelerate the rally toward 26,500, with an extended upside potential toward 26,700 on strong follow-through. Bank Nifty is likely to continue outperforming the Nifty index in the near term, they added.

Key cues for investors going forward include US payroll and unemployment data for global market direction. Markets may move within a steady range as participants wait for clearer earnings‑led triggers and clarity on the India-US trade deal, market watchers said.

- IANS

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Reader Comments

P
Priya S
While the numbers look good, I'm a bit concerned. The article mentions FII outflows and global uncertainties. This feels like a fragile rally. The common man isn't feeling this boom with high prices of essentials. The disconnect is real.
R
Rohit P
PSU banks finally getting their due! Improving asset quality is key. Had invested in a few last year and it's paying off. Hope the momentum continues. Bharat ka banking sector strong ho raha hai.
S
Sarah B
Interesting analysis. The outperformance of midcap and smallcap indices is a healthy sign for broader market participation. However, the reliance on US data for direction shows we're still not fully decoupled from global headwinds. Cautiously optimistic.
K
Karthik V
Auto stocks up is good news for manufacturing and jobs. But what about the FMCG dip? Higher taxes on cigarettes might be good for public health, but it hits that sector hard. Market ka sentiment thoda mixed hai.
M
Meera T
All-time highs are exciting, but let's not forget the retail investors who get in at the peak and then panic sell. Articles should also stress the importance of long-term SIPs and not chasing momentum. Responsible reporting zaroori hai.

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