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Indian Markets Open Flat in 2026 Amid Low Trading
2 Jan
Summary
- Indian equities began 2026 with flat benchmarks and thin trading volumes.
- ITC shares plunged 9.7% due to new excise duties on tobacco products.
- Foreign portfolio investors were net sellers, offloading ₹3,268.6 crore.
Indian equity markets commenced 2026 with a muted performance on Thursday, as benchmark indices closed flat amidst very low trading volumes. The NSE Nifty finished with a slight gain, while the BSE Sensex experienced a minor decline. Overseas markets were largely closed for the New Year, contributing to the subdued domestic trading activity. Stock-specific movements were prominent, with analysts expecting this trend to persist as third-quarter results begin next week.
The FMCG sector faced a significant downturn, with the Nifty FMCG index falling over 3%. This decline was primarily driven by ITC, which plummeted 9.7%, and Godfrey Phillips India, down 17%, following the finance ministry's announcement of an early February effective date for additional excise duties on tobacco products. Conversely, sectors like Auto, IT, Realty, and Metal saw modest gains.
Market breadth remained narrow, with more stocks declining than advancing on the BSE. Foreign portfolio investors were net sellers of ₹3,268.6 crore on Thursday, continuing a trend of significant outflows observed in December. Despite this, analysts suggest that the market has already undergone substantial corrections and anticipate potential recovery in beaten-down sectors like IT and pharma, alongside banking and auto stocks.
