The BSE Sensex slipped 32 points, or 0.04%, to close at 85,188.60, while the NSE Nifty 50 edged up 17 points, or 0.06%, to settle at 26,146.55, hovering comfortably above the 26,100 mark.
On the 30-stock Sensex, declines were led by ITC, Bajaj Finance, Asian Paints, Bharat Electronics and ICICI Bank, with losses ranging from about 0.4% to nearly 10%.
Broader market moves were mixed. Smallcap stocks slipped 0.1%, while midcaps outperformed, rising 0.4%.
Shares of cigarette makers were hit particularly hard after the government announced an increase in excise duty on cigarettes effective February. ITC fell 9.7%, while Godfrey Phillips plunged 17.1%. Analysts at Jefferies described the tax hike as “a clear negative” for market leader ITC, warning that it could weigh on cigarette volumes and reignite concerns over market-share losses to the illicit trade.
The sell-off in ITC dragged the fast-moving consumer goods index down 3.2%.
Indian equities posted solid gains in 2025, with the Sensex and Nifty rising 9.1% and 10.5%, respectively, though both underperformed their emerging-market and Asian peers.
Expert views
Indian equity markets began the first trading session of the year on a stable and constructive footing, with global cues remaining largely muted as most international markets were closed for the holiday, allowing domestic factors to take centre stage, said Ponmudi R, CEO at Enrich Money, adding that the automobile sector emerged as the top gainer, buoyed by strong investor optimism following the release of impressive monthly sales numbers, reinforcing confidence in sustained demand momentum.
“India’s resilient domestic demand, reform-driven growth framework, policy continuity, and ongoing government-led capital expenditure continue to provide comfort to investors and attract fresh buying at lower levels, offering strong downside support to equities. Overall, the tone at the start of the year remains constructive, with investor preference clearly tilted toward quality businesses backed by sustainable earnings and strong balance sheets,” said Ponmudi.
In technical terms, going ahead, for Nifty, the zone of 26200-26240 will act as an important hurdle for the index, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, adding that “any sustainable move above the 26240 level will lead to a sharp upside rally in the index upto the 26400 level in the short term. On the downside, the zone of 26030-26000 will act as immediate support for the index.”
Global Markets
Most global markets were closed for the New Year holiday.
Crude impact
Oil prices fell on Wednesday, capping a bruising year for energy markets as rising supply concerns overshadowed demand. Crude prices posted annual losses of nearly 20% in a year shaped by wars, higher tariffs, increased OPEC+ production and sanctions on major producers including Russia, Iran and Venezuela.
Brent crude futures slid about 19% in 2025, the steepest annual percentage decline since 2020, marking a third consecutive year of losses, the longest such run on record. U.S. West Texas Intermediate crude fared similarly, posting an annual drop of almost 20%.
Rupee vs Dollar
The Indian rupee weakened on Thursday, slipping 10 paise to a provisional close of 89.98 against the U.S. dollar in the first trading session of 2026, pressured by persistent foreign fund outflows and a softer tone in domestic equities.
The dollar index, which measures the greenback against a basket of six major currencies, was up 0.09% at 98.32, adding to pressure on emerging-market currencies.
(with inputs from agencies)