Mumbai:Indian equity markets began the first trading session of 2026 on a cautiously positive note, supported mainly by gains in auto stocks, as investors reacted to strong December sales numbers and looked ahead to earnings and policy cues.
Benchmark indices Sensex and Nifty 50 edged higher in early trade, reflecting improved sentiment after a mixed performance in global markets and thin trading volumes due to the year end holiday period. Market participants remained selective, focusing on sectors showing clear demand recovery.
Auto stocks were in focus after several manufacturers reported healthy vehicle sales in December, helped by year end demand and improving consumer confidence. Shares of leading car and SUV makers moved higher, giving the sector an early lead on the first day of the year.
In contrast, cigarette stocks came under pressure after the government announced an increase in excise duty, raising concerns about higher costs and potential impact on margins. This dragged down select fast moving consumer goods counters.
Broader markets were relatively steady, with mid cap and small cap stocks trading flat, as investors avoided aggressive bets and waited for clearer signals on earnings growth and interest rate direction.
Analysts say the positive start to 2026 reflects expectations of better corporate earnings, continued government support for key industries and stable domestic economic conditions. However, they also caution that foreign investor flows, global economic trends and upcoming policy decisions will play a major role in shaping market direction in the coming weeks.
Overall, markets opened the new year with mild optimism, driven by sector specific strength rather than broad based buying, as investors balance hopes of recovery with global uncertainties.