Sensex rises 350 pts from day's low, Nifty at fresh high: 5 key reasons behind market gain

Stock market today: Sensex, Nifty rise amid strong buying interest. 

• Sensex and Nifty rebounded; Nifty reached a new all-time high of 26,373.20
• Reliance shares rose over 1 percent, boosting market sentiment
• FII inflows, global cues, and RBI liquidity support aided the market recovery

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The equity benchmark indices recovered sharply from early losses on Monday on buying in select heavyweights and firm global cues.

The Sensex, which had slipped 245.26 points or 0.28 percent to an intraday low of 85,516.75 in early trade, later rebounded 366.75 points or 0.43 percent to hit a high of 85,883.50.

The broader Nifty also recovered from below the 26,300-mark to scale a fresh all-time high of 26,373.20, up from the day’s low of 26,263.60.

Market sentiment improved after 10.30 am, with buying seen in auto, FMCG, PSU banks, realty and select heavyweight stocks.

Bharat Electronics, Maruti Suzuki India and Eicher Motors were among the top gainers in the Nifty50 pack, rising up to 3 percent, while Infosys and HCL Technologies were the major laggards, declining up to 2 percent.

Key reasons behind the recovery

1) Buying in bluechip stocks: Shares of index heavyweight Reliance Industries rose over 1 percent to hit a fresh 52-week high of Rs 1,611.80 per share. The stock’s rise lifted the market capitalisation of the country’s most valued firm closer to the Rs 22 lakh crore mark, providing support to the benchmark indices.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said "The market is likely to remain resilient in the near-term since we are at all time high and the momentum might support the bulls."

RIL shares hit record high

2) FII inflows: Foreign Institutional Investors (FIIs) turned net buyers on Friday, purchasing equities worth Rs 289.80 crore, after a prolonged phase of selling. The shift in FII activity helped improve investor sentiment.

"The year 2026 is likely to witness some changes in the FII strategy. Significant improvement in India’s fundamentals is likely to attract net FII inflows in 2026. Robust GDP growth and prospects of improvement in corporate earnings in 2026 augur well for positive FII flows in 2026," added Vijayakumar.

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3) Positive global cues: Asian markets were trading higher, with South Korea’s Kospi, Japan’s Nikkei 225 and Shanghai’s SSE Composite index posting gains. US markets had ended mostly higher on Friday, supporting risk appetite.

4) Crude declines: Brent crude, the global oil benchmark slipped 0.08 percent to USD 60.70 per barrel. Lower crude prices are generally positive for India as they help ease inflation and reduce the country’s import bill.

5) RBI liquidity support: The Reserve Bank of India is scheduled to conduct a Rs 50,000 crore open market operation (OMO) purchase on January 5 as part of a planned Rs 2 lakh crore liquidity injection programme, following a similar auction on December 29. The move is aimed at ensuring adequate liquidity in the banking system.

Technical Analysis

Anand James, Chief Market Strategist at Geojit Investments Ltd, said a strong close on Friday near the upper Bollinger band suggested a continuation of upside momentum. However, he cautioned that a high VIX level indicates the possibility of increased volatility. He said the Nifty is expected to face resistance around 26,380 and 26,450–26,550 levels, while the immediate support is seen near 26,288.

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