Stock Market Today: Sensex Trades Above 85,000, Nifty 50 Holds Near 26,250

Indian stock markets trade firm today as autos and banks lead gains, while policy changes create sector-specific action

The Indian stock market trades with a positive tone at the start of the new year. Benchmark indices show steady gains as investors respond to strong domestic cues, especially from the automobile and banking sectors. 

Global uncertainty and uneven foreign investment flows still influence sentiment, but domestic fundamentals provide support. Overall trading reflects cautious optimism rather than aggressive buying.

Benchmark Indices Performance

The Nifty 50 trades in the range of 26,245 to 26,260 during the session, while the BSE Sensex stays above the 85,000 level. Both indices rise by around 0.3 to 0.4 percent compared to the previous close. 

Market breadth remains healthy, with most stocks trading in the green. Large-cap stocks lead the move, while mid-cap and small-cap stocks also participate, though with relatively lower momentum.

Sectoral Trends

A majority of sectoral indices are in the green zone at press time. The automobile sector is at the very top of the charts, with good sales data in December 2025 and the positive demand forecast for the next quarter being the main reasons for the support.

The banking and financial services stocks further add to the bullish sentiment in the market. Investors are looking for stable credit growth that provides benefits through a favorable interest rate position. There is still a lot of buying activity in the private banks and a few of the public sector banks.

Metal stocks are also higher due to the firm global commodity prices. The growth of industrial activity in China is an advantage for this sector. 

Tobacco and FMCG Stocks

After the government announces a new excise duty structure on cigarettes, a selling wave hits the tobacco industry. Leading manufacturers incurred one of their largest single-day losses in recent years. 

The market is influencing the tobacco industry due to the fear that high taxes will hike the costs and, hence, the profits will be reduced in the short term.

This change also has an adverse effect on the fast-moving consumer goods segment, with the largest impact on the companies that are highly dependent on cigarette sales. Investors are becoming cautious as they revisit income projections for this sector.

Macroeconomic and Policy Environment

The global macroeconomic scenario continues to be favorable for the stock market. The central banks' recent signals are in contrast to their earlier stance and indicate that the monetary policies are becoming more lenient. This leads to expectations of steady rates for borrowers and a continued demand for credit.

Fiscal policy also stays in focus as the Union Budget approaches. Market participants expect continued emphasis on infrastructure, manufacturing incentives, and consumption-led growth. Any major tax or spending announcement has the potential to shift sector leadership.

Foreign and Domestic Investment Flows

Foreign portfolio investment remains mixed. While domestic institutional investors continue to provide steady support, foreign investors show selective participation. Past outflows set a ceiling on sharp market rallies, even when fundamentals remain strong. Analysts think that global stability and fair valuations could lure foreign investors back with more substantial investments.

Domestic mutual funds and retail investors are the main backbone of market stability. The regular inflow of investors through SIPs helps absorb volatility and maintain long-term sectoral trends.

Key Risks and Market Sentiment

Although the market has a positive side, risks are still present. Global conflicts and rate hikes may cause a temporary decline in the stock market. The imposition of a significant excise tax on cigarettes is a clear example of how a policy shift can have an immediate impact on a market sector.

Investor sentiment is neutral rather than overly positive. Investors concentrate on the strength of the company's earnings and the soundness of its financial position instead of joining in the momentum chase.

What the Market is Watching Out for

The upcoming corporate earnings releases are a turning point in the quest for clarity surrounding the profit growth and management outlook. The data concerning the sales of automobiles in January will also be awaited as an indicator of support or diminished demand. 

The Union Budget is the main event of importance for the next few weeks. Budget proposals related to taxation, infrastructure development, and consumer assistance will determine the market direction for the whole year of 2026.

Final Thoughts

The Indian stock market trades higher today, supported by strong performance in autos, banks, and metals. Policy-related concerns weigh on tobacco and select FMCG stocks. The overall tone remains constructive, with investors balancing growth opportunities against policy and global risks. Selective buying and focus on fundamentally strong companies define the current market approach.