Indian stock market benchmarks, the Nifty 50 and Sensex, are expected to start January 2, 2026, on a muted note, with thin trading volumes anticipated due to the closure of most global markets.

Market Performance on January 1, 2026

On the first trading day of 2026, the Sensex ended marginally lower, losing 32 points (0.04%) to close at 85,188.60, while the Nifty 50 edged up by 17 points (0.06%) to settle at 26,146.55. The day saw investors focusing on stock-specific movements in the absence of fresh market triggers.

Global and Domestic Cues

Gift Nifty indicated a flat but positive opening for the Indian benchmark index, trading at 26,314, up 23 points or 0.09% from the previous Nifty futures close.

Market Outlook and Analysis

Analysts anticipate range-bound movement for the benchmark indices, with stock-specific actions dominating trading. Investors are likely awaiting the Q3 results and updates on India-US trade talks for fresh impetus.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, sees potential for further upside in the Sensex, provided crucial support levels hold. He noted positive technical signals, highlighting a promising reversal pattern on the daily charts. Immediate support zones for the Sensex are identified at 85,000 and 84,800, with upside potential toward 85,800 and 86,100 if the index remains above these levels. A decisive move below 84,800, however, could make the trend vulnerable.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, echoed a similar view, suggesting that the broader trend remains supportive despite near-term resistance. He expects the Nifty to move higher and decisively break above the 26,200 hurdle after a period of consolidation. Immediate support for Nifty lies at 26,050, and a breakout could lead to a move towards 26,300–26,400 in the near term.

FII/DII Activity

On January 1, 2026, Foreign Institutional Investors (FII) net sales were ₹3,268.60 crores, while Domestic Institutional Investors (DII) net purchases stood at ₹1,525.90 crores.

Key Levels to Watch

• Nifty: Immediate support at 26,100, with resistance around 26,200. A break beyond 26,200 could lead to a sharp breakout towards 26,300-26,400. Near-term support levels are at 26,021/25,947, and resistance levels are at 26,262/26,336.
• Sensex: Immediate support at 84,860 and major support at 84,419. Immediate resistance is at 85,301 and later at 85,741.

Sectoral Outlook

Auto, realty, and metal stocks showed healthy buying in the previous session, while FMCG faced a correction. Market analysts suggest focusing on banking, auto, and metal stocks while managing risks.

Other Key Points

• The market breadth remained positive, indicating that stock-specific opportunities are likely to continue dominating trade.
• The government's decision to impose a three-year safeguard duty on select steel imports could positively impact metal stocks.
• RBI's infusion of $32 billion into money markets in January 2026 is expected to keep markets stable and liquid.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult with a qualified financial advisor before making any investment decisions.