The equity markets extended gains on January 2, supported by strong buying in automobile and select banking stocks. The BSE Sensex rose around 350 points, while the Nifty 50 climbed above the 26,250 mark, reflecting cautious optimism among investors at the start of the New Year amid stock-specific action and limited broader participation.
Automobile stocks emerged as the clear outperformers after companies reported healthy December sales numbers. Hero MotoCorp and TVS Motor Company gained up to 3 per cent, benefiting from strong volume growth, while Maruti Suzuki also traded firmly, lending support to the benchmark indices. Other auto names such as Bosch and Motherson added to the momentum, pushing the Nifty Auto index higher.
The banking space also contributed to the upside, with PSU lenders showing buying interest. Shares of Punjab & Sind Bank and Indian Bank advanced, helping offset weakness in other pockets of the market. Investors remained selective, focusing on stocks with visible earnings momentum and positive business updates.
However, gains were capped by pressure in the FMCG sector. ITC declined close to 4 per cent, emerging as one of the top drags on the benchmarks amid concerns over higher taxes and near-term margin pressures. Other consumer stocks such as Godfrey Phillips, Zydus Wellness, and Parag Milk Foods also traded lower, keeping the Nifty FMCG index under pressure.
Shares of Hyundai Motor India slipped despite reporting year-on-year growth in sales, indicating cautious sentiment and some profit booking in the stock. Bajaj Auto traded marginally lower, reflecting mixed performance within the broader auto space despite overall sectoral strength.
Market participants also tracked global cues and commodity prices, while trading volumes remained relatively thin, a typical trend during the early days of the year. Analysts said investors are likely to remain stock-specific in the near term, with attention shifting gradually towards quarterly earnings announcements and macroeconomic data.
Overall, strength in auto and PSU bank stocks helped the Sensex and Nifty hold firm, even as FMCG and select consumer names limited the upside, underscoring a cautious but positive undertone in the market.
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