The last day of 2025 is not without its share of drama. The Indian equity market saw a smart rally in the afternoon trade. The Nifty 50 and 30-stock Sensex surged almost 1% each. Also, the broader indices rallied in line with the main indices.
The big gainers in trade today
The rally was led by the oil & gas and banking majors like HDFC Bank, ICICI Bank, Axis Bank, etc. Further, aided by steel stocks. Reliance Industries was the biggest mover of the Nifty 50, contributing 52.5 points alone. JSW Steel, Tata Steel, and Reliance Industries were the top three gainers in the Nifty 50.
It is to be noted that Nifty IT was the only sectoral index trading in the red, but was almost flat. Apart from that, the volatility index, India VIX, fell 1.5% in today’s trade. The overall breadth was in favour of bulls. Out of 3,200 traded stocks, 2,240 stocks were in the green, while a mere 870 stocks were in the red.
3 reasons why the market is rallying today
There are many catalysts that could potentially lead the markets higher. According to VK Vijayakumar, Chief Investment Strategist of Geojit Investments, “the market has the potential for a directional move upwards but is being weighed down by sustained FII selling and absence of fresh triggers like positive news on the US-India trade front.”
He listed out the key events to watch out for that could potentially lead to the markets scaling new highs. “The coming days are going to be eventful, starting with the auto sales data for December, Q3 corporate results, expectations from the Budget and other news relating to the global economy, like the possible Fed action in 2026.”
Here is a quick look at the 3 main reasons why the market is rallying-
#1 3-year safeguard duty
The government of India has announced up to 12% safeguard duty for three years on select steel imports. This bolstered expectations of better pricing protection for domestic steel producers. The decision led to a rally in steel stocks. JSW Steel, Tata Steel, Steel Authority of India (SAIL), Jindal Steel, and many others.
#2 Earnings optimism
The countdown has begun not just for the new year 2026 but also for the Q3 results. The Q3 earnings season kicks off with the results of tech heavyweights TCS and Infosys. The market will be carefully watching out for cues of a potential uptick in earnings, as indicated by most market experts. According to Geojit’s VK Vijaykumar, “This is significant since there is a lot of hope that there will be a rebound in earnings, going forward. Earnings growth will be the single most important factor determining the market trend in 2026. The FII flows in 2026, too, will depend on the earnings performance and expectations surrounding that.”
#3 December Auto sales
The December auto sales are also keenly awaited by the markets. The street is expecting robust sales with double-digit growth on a year-on-year basis across categories. According to a leading brokerage house, Nuvama, “sales volumes are likely to be driven by continued positive customer sentiment spurred by better affordability (courtesy GST cuts), new products, interest rate cuts and adequate finance availability despite some pressure on rural sentiments due to a drop in retail crop prices.” Industry observers are also expecting a double-digit rise in exports led by growth in Asia, Africa and Latin America.
