On January 2, 2025, benchmark indices Sensex and Nifty extended their gains for the second consecutive session, led by robust performances in the auto and banking sectors. The broader markets, however, remained subdued, with mid-cap and small-cap indices trading flat.
At 9:30 AM, the Sensex was up by 252.00 points (0.32%) to 78,759.41, while the Nifty rose by 77.35 points (0.33%) to 23,820.25. Advancing stocks outnumbered decliners, with 2,012 shares gaining and 969 shares declining.
Key Sectoral Performance
Top Gaining Sectors:
- Nifty Auto: Auto stocks rallied on positive December sales data. Major contributors included:
- Tata Motors: Reported a 1% YoY increase in domestic sales to 76,599 units.
- M&M (Mahindra & Mahindra): Benefited from robust tractor sales, which rose 22% YoY.
- Maruti Suzuki: Continued its upward momentum with strong passenger vehicle sales.
- FMCG and Infra Indices: Gained around 0.5%, bolstered by consistent demand trends and infrastructure project expansions.
Underperforming Sectors:
- Consumer Durables: Declined on weak retail activity.
- PSU Banks: Experienced a mild correction after recent gains.
- Metal Index: Slipped into the red, reflecting global commodity price pressures.
Broader Market Trends
The broader market, represented by mid-cap and small-cap indices, traded flat despite optimism in select sectors like pharmaceuticals, real estate, and hospitals. Analysts expect the broader market to outperform large caps in the coming months due to stronger earnings growth.
Expert Insights
Market Volatility Ahead
Aishvarya Dadheech, Founder and CIO of Fident Asset Management, noted:
- Macroeconomic Indicators: These remain strong, with attractive valuations and potential stabilization in foreign inflows by March or April.
- Risks: Short-term challenges include rupee volatility against the dollar and the possibility of earnings misses.
Technical Outlook
Akshay Chinchalkar, Head of Research at Axis Securities, emphasized:
- Resistance Levels: Nifty faces significant resistance between 23,876 and 23,970, where the 200-DMA resides.
- Support Levels: Short-term support lies at 23,545 to 23,640, with downside risk extending to 23,460.
- Bullish Threshold: A close above 24,150 would indicate a shift in momentum.
Key Stock Movements
Top Gainers on Nifty:
- Kotak Mahindra Bank
- Bajaj Finance
- Tata Motors
- Dr Reddy’s
- Shriram Finance
- Maruti Suzuki
Major Laggards on Nifty:
- NTPC
- HDFC Bank
- Hero MotoCorp
- TCS
Auto Sector Highlights
- Tata Motors: Marginal 1% growth in domestic sales, supported by passenger vehicle sales (44,289 units, up 1% YoY) but offset by a 1% decline in commercial vehicle sales.
- M&M: Citi maintained its buy rating due to strong volume momentum in utility vehicles and tractors. The upcoming harvest season is expected to further boost sales.
- Maruti Suzuki: Consistent performance keeps it among the top contributors to the Auto Index’s gains.
Market Outlook
While the markets have shown resilience, foreign institutional investors (FIIs) continue to sell equities, with net sales of ₹1,782 crore on January 1, 2025. Domestic institutional investors (DIIs), however, counterbalanced this with net purchases of ₹1,690 crore.
Conclusion
The Sensex and Nifty are poised for cautious optimism, supported by auto and banking stocks. However, broader market participation remains tepid, and key resistance levels could test bullish momentum. Investors are advised to monitor Q3 earnings results and global economic trends for further cues.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are encouraged to consult certified professionals before making investment decisions.
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