The final trading session of 2025 delivered its share of drama as Indian equities staged a sharp rally in afternoon trade. Benchmark indices Nifty 50 and Sensex surged nearly 1% each, while broader markets moved in tandem, reflecting strong risk appetite.
Top Gainers Power the Rally
The rally was led by heavyweight stocks from the oil & gas, banking and metal sectors. Banking majors such as HDFC Bank, ICICI Bank and Axis Bank witnessed strong buying interest. Among index heavyweights, Reliance Industries emerged as the biggest contributor to the Nifty 50, adding 52.5 points on its own.
Metal stocks also outperformed, with JSW Steel, Tata Steel and Reliance Industries featuring as the top three gainers on the Nifty 50.
Notably, Nifty IT was the only sectoral index trading marginally in the red, though losses remained limited. Meanwhile, market volatility eased, with India VIX slipping 1.5% during the session.
Market breadth strongly favoured the bulls. Of the nearly 3,200 stocks traded on the exchanges, around 2,240 stocks advanced, while just about 870 declined.
Why Is the Market Rallying Today? Three Key Reasons
According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, the market has the potential for a sustained upward move, although it continues to face pressure from persistent foreign institutional investor (FII) selling and a lack of fresh global triggers, particularly on the US-India trade front.
He added that the coming days could be eventful, with key triggers including December auto sales data, Q3 corporate earnings, Budget expectations and global macro cues such as potential US Federal Reserve action in 2026.
Here are the three key factors driving today’s rally:
1) 3-Year Safeguard Duty on Steel Imports
The government’s decision to impose up to a 12% safeguard duty for three years on select steel imports lifted sentiment across the metal space. The move is expected to provide pricing protection to domestic steelmakers, triggering a rally in stocks such as JSW Steel, Tata Steel, SAIL and Jindal Steel.
2) Optimism Ahead of Q3 Earnings
Investor focus is shifting to the upcoming Q3 earnings season, set to begin with results from IT majors TCS and Infosys. Market participants are hopeful of a rebound in corporate earnings.
According to Vijayakumar, earnings growth will be the most critical factor shaping market direction in 2026, with FII flows also closely tied to earnings performance and forward expectations.
3) December Auto Sales
Markets are also factoring in strong December auto sales numbers. Street estimates point to double-digit year-on-year growth across segments, supported by better affordability due to GST cuts, new product launches, easing interest rates and improved credit availability.
Brokerage firm Nuvama expects sales momentum to remain healthy, though some pressure may persist on rural demand due to softer crop prices. Industry watchers are also anticipating a double-digit rise in exports, driven by demand from Asia, Africa and Latin America.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Stock market investments are subject to market risks.
