Pre-Market Nifty/Sensex Analysis Today, Jan 01: Indian Markets Set to Begin 2026 on a Positive Note; Auto Stocks in Focus

Asian market peers remained closed due to the New Year holiday. Meanwhile, overnight cues from the US markets were subdued after Wall Street wrapped up 2025 with all three major indices posting modest losses in the final session of the year.

Among key domestic triggers, auto sales data is expected to drive market sentiment, keeping auto stocks in focus on January 1, 2026. The auto index gained over 1% on Wednesday, and in calendar year 2025, it advanced 23.45%, emerging as one of the top three performing sectors during the year.

Institutional Flows – FIIs and DIIs

On Wednesday, December 31, Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth ₹3,597.38 crore. This marked their seventh consecutive session of selling. As a result, FIIs turned net sellers of ₹34,349.62 crore in December, the highest monthly outflow since September 2025.

In contrast, Domestic Institutional Investors (DIIs) continued their buying spree, purchasing equities worth ₹6,759.64 crore, marking their 48th consecutive session of net inflows.

Overall, FIIs were net sellers in 8 out of the 12 months of calendar year 2025, while DIIs remained net buyers throughout the year.

Wednesday’s Market Action

In the final trading session of 2025, Indian stock market benchmarks ended higher, led by metal stocks after the government imposed a three-year import tariff on select steel products. The Nifty and Sensex closed out the year with the Nifty Volatility Index hovering around 9.4, its lowest year-end level.

At the closing bell, the Nifty 50 advanced 190.75 points, or 0.74%, to settle at 26,129.60, while the Sensex rose 545.52 points, or 0.64%, to close at 85,220.60. The benchmark indices snapped a four-day losing streak. The Bank Nifty also mirrored the broader market strength, gaining 0.69% to close above the 59,500 mark.

Wall Street Update

Wall Street concluded 2025 on a subdued note, with all three major indices recording modest losses in the final overnight session.

That said, US equities still delivered a strong performance for the year, registering a third consecutive year of double-digit gains, an impressive feat given the heightened volatility seen throughout 2025.

US benchmarks declined for the fourth straight session on Wednesday. The S&P 500 fell 0.74% to close at 6,845.50, the Nasdaq Composite slipped 0.76% to 23,241.99, and the Dow Jones Industrial Average shed 303.77 points, or 0.63%, to end at 48,063.29.

On the macroeconomic front, the US Labor Department reported that first-time claims for unemployment benefits unexpectedly declined in the week ended December 27