Sensex jumps 600 pts in first trading session of 2025; Dec auto sales among key factors behind market rise today

Sensex, Nifty gain nearly 1% on first trading session of 2025 amid strong auto sales data, budget optimism

Sensex and Nifty rebounded sharply after trading lower in early trade on the first trading session of 2025 on Wednesday, supported by robust auto sales data and optimism ahead of the Union Budget.

The benchmark BSE Sensex surged 617.48 points, or 0.79 percent, at 78,756.49 after a flat opening. Similarly, the NSE Nifty advanced 178 points, or 0.75 percent, to at 23,822.80.

Market sentiment improved markedly in the second half of the trading session. Here are key factors behind the market rally

1) Strong December Auto Sales: Auto stocks were among the top performers following impressive sales data for December, a period that typically sees muted demand. Maruti Suzuki led the gains, rising over 3 percent after the company reported a 30 percent year-on-year increase in December sales, delivering 1,78,248 units compared to 1,37,551 units a year ago.

Mahindra & Mahindra also reported strong numbers, posting an 18 percent jump in SUV sales to 41,424 units in December from 35,174 units in the corresponding period last year. The better-than-expected sales figures reflect renewed consumption demand, which had been subdued, of late.

2) Optimism Ahead of Union Budget: Investors are pinning hopes on a growth-oriented Union Budget for 2025-26, set to be presented on February 1. There are hopes that the government may introduce measures to stimulate economic growth, including tax relief for middle-income earners and adjustments to Securities Transaction Tax (STT), as recommended by industry bodies.

Additionally, expectations of a potential rate cut by the Reserve Bank of India in February further buoyed market sentiment.

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3) Recovery in Banking Stocks: Banking stocks staged a recovery, with shares of HDFC Bank and Axis Bank climbing over 1 percent each, contributing to the rally in the indices.

Technical Analysis

Anand James, Chief Market Strategist at Geojit Financial Services, noted that while momentum is yet to pick up strongly, the Nifty is expected to trade within the range of 23,710-23,580 in the near term. "If momentum surprises, we may see levels of 24,025, but the probability appears low," he added.

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