India's equity benchmarks have surged to unprecedented heights, propelled by the nation's robust economic expansion. On Monday, December 1, 2025, both the Nifty and Sensex indices surpassed previous records, driven by stronger-than-expected GDP growth figures for the July-September quarter.
The Nifty 50 index rose 0.31% to reach 26,284.40, while the Sensex gained 0.35% to stand at 86,008.46. Earlier in the session, both indices had climbed as much as 0.5% to hit all-time highs. The surge reflects growing investor confidence fueled by the country's economic performance.
India's economy expanded by an impressive 8.2% during the July-September period, marking its fastest pace in 18 months. This growth was attributed to strong consumer spending and front-loading of production in anticipation of local festivals and potential U.S. tariffs. The GDP figure exceeded expectations, further boosting market sentiment.
Simran Jeet Singh Bhatia, a senior research analyst at Almondz Group, noted that the strong growth data has instilled confidence among investors, driving the market to record levels. Besides robust economic data, cooling valuations, anticipated earnings recovery, and favorable fiscal and monetary policies have also contributed to the market's upward trajectory.
The positive market sentiment was broad-based, with 12 out of 16 major sectors advancing. Small-cap and mid-cap stocks also experienced gains, rising by 0.6% and 0.3%, respectively. Several individual stocks also saw significant movement. Lenskart Solutions, for example, rose by 2.5% following a report of higher quarterly profits. Fintech firm Paytm also gained 3%, continuing its rally for the fourth consecutive session. Brokerages like Goldman Sachs and ICICI Securities have raised their price targets for Paytm, and the company has received approval to operate as an online payment aggregator.
Conversely, cigarette manufacturers ITC and Godfrey Phillips experienced declines of around 1% following reports of a potential government bill to levy excise duty on tobacco products.
Looking ahead, investors are awaiting the Reserve Bank of India's (RBI) rate decision on December 5. The robust economic growth has increased the likelihood of a rate pause, according to analysts. A prior Reuters poll had projected a potential 25-basis-point rate cut. Following the release of the GDP data, Barclays revised its growth forecast for fiscal year 2025-26 to 7.2%, up from 6.8%. Madhavi Arora, Chief Economist at Emkay Global Financial Services, suggested that the strong momentum is likely to extend into the next quarter, supported by healthy consumer demand.
The Indian stock market's recent performance contrasts with the previous session, where profit-booking and mixed global cues led to a largely unchanged market. However, the underlying sentiment remains optimistic, driven by expectations of interest rate cuts and strong domestic fundamentals.
