Sensex settles 550 pts higher, Nifty above 26,100 in final session of 2025: 5 key factors behind market rise

Stock market today: Sensex, Nifty rise in trade.

• Sensex and Nifty rebounded after five days of decline, led by steel stocks rally
• Government imposed a three-year safeguard duty on select steel imports
• Market volatility eased and crude oil prices slipped, supporting equities

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The domestic equity benchmarks ended the final trading session of the 2025 calendar year on a positive note, snapping their recent losing streaks. Both the Sensex and the Nifty advanced by nearly 1 percent. The Nifty opened marginally higher and steadily moved towards the 26,200 level during the session; however, profit-booking in the final hour pared some of the intraday gains.

After five consecutive sessions of decline, the Sensex rose by 545.52 points, or 0.64 percent to settle at 85,220.60. During the day, the index had climbed as much as 762.09 points, or 0.90 percent to an intraday high of 85,437.17. Meanwhile, the Nifty gained 190.75 points, or 0.74 percent to settle at 26,129.60, marking its first advance after four straight sessions of losses.

Sensex and Nifty gained around 10 percent each in 2025, underperforming Asian peers and global market indices. Media, Realty and IT sectors fell the most among the sectoral indices, dropping in the range of 12-20 percent during the year.

However, PSU Banks, Metal and Auto sectors emerged as the best performing indices in 2025, rising 23-30 percent. Shriram Finance, Maruti Suzuki, Eicher Motors, Hindalco Industries, SBI Life and Bajaj Finance were the top Nifty gainers this year. 31 Nifty stocks gave positive returns, with gains ranging from 1 to 72 percent.

Vinod Nair, Head of Research at Geojit Investments, said "Looking ahead, expectations are rising for a constructive rebound in 2026, supported by improving demand conditions. Investor sentiment is likely to hinge on corporate earnings and a potential uptick in nominal GDP growth."

From the Sensex firms on Wednesday, Tata Steel, Kotak Mahindra Bank, Reliance Industries, Axis Bank, Titan and Trent were among the biggest gainers. However, Tata Consultancy Services, Tech Mahindra, Infosys, Bajaj Finance and Sun Pharma, were the laggards.

Key factors behind the market rise

1) Steel stocks rally: Shares of major steelmakers gained after the government announced a three-year safeguard duty of up to 12 percent on select steel imports, raising expectations of improved pricing support for domestic producers.

Tata Steel rose 2.2 percent to Rs 179.7, while JSW Steel gained 3.3 percent to Rs 1,148.1. Jindal Steel advanced 3.6 percent to Rs 1,057.8. Jindal Stainless climbed 2.8 percent to Rs 859.7 and NMDC traded marginally higher at Rs 83.7, up 0.4 percent from its previous close.

Ajit Mishra – SVP, Research at Religare Broking, noted "Market sentiment was primarily driven by domestic policy developments and stock-specific action. The government’s decision to impose safeguard duties on select steel imports boosted sentiment in the metal space, enhancing earnings visibility for domestic producers. Additionally, notable strength in heavyweight stocks across sectors provided further support to the market. These positives helped offset the impact of continued foreign institutional investor outflows, which otherwise kept overall sentiment cautious."

Steel stocks rally: Tata Steel, JSW Steel, Jindal Steel gain 2-4%

2) Crude oil eases: Brent crude, the global oil benchmark, slipped 0.10 percent to USD 61.27 per barrel. Lower crude prices tend to support the Indian market as they help ease inflationary pressures.

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3) Volatility cools: India VIX, the market volatility index, declined more than 3 percent to 9.37. A lower VIX reflects reduced investor anxiety and supports risk appetite in equities.

4) Value buying: Traders were seen picking up stocks after the recent decline, with the Sensex having declined for five straight sessions and the Nifty for four sessions, leading to bargain buying in select counters.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, said, "The market has the potential for a directional move upwards but is being weighed down by sustained FII selling and the absence of fresh triggers like positive news on the US-India trade front."

5) Buying in mid-, small-cap shares: Strong buying interest was also seen in the broader market, which further supported sentiment. Both Nifty mid-cap and small-cap100 indices rose by up to 1 percent.

Technical view

Ajit Mishra, added "From a technical standpoint, the Nifty has once again approached the upper end of its prevailing consolidation range near 26,200. A decisive breakout above this level could trigger the next leg of upward momentum, while failure to do so may lead to renewed profit-taking. We maintain a positive yet cautious outlook on the index and recommend a sector-specific approach, with a preference for banking, auto and metal stocks, while remaining selective in other sectors."

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