Stocks began 2025 on a promising note as the benchmark Sensex rallied more than 368 points on Wednesday with auto stocks leading the drive on robust December sales.
The new year, however, added to the woes of the rupee which closed at a new record low of 85.6450 to the US dollar against its previous finish of 85.6150 because of the broad strength of the greenback and demand from importers.
Besides, the rupee has been weighed down by a widening trade deficit amid sustained selling by foreign portfolio investors (FPIs).
In the first trading session of 2025, the 30-share Sensex settled at 78507.41, while the Nifty 50 climbed 98.10 points to 23742.90.
The broader markets were also in the green with the BSE midcap index rising 0.50 per cent and the smallcap gauge by 1.03 per cent.
Nearly all the sectoral indices recorded gains with the BSE auto index rising 1.23 per cent. It was closely followed by the capital goods index which was up 1.22 per cent.
“Investors will watch out for December manufacturing PMI of India and US to be released on Thursday. FPIs continue to sell, offloading equities worth ₹4,645 crore on Tuesday, leading to outflows of ₹17,000 crore in December. We expect markets to remain sideways until the start of the Q3 result announcements that will likely induce stock/sector specific action,” Siddhartha Khemka, head — research, Wealth Management, Motilal Oswal Financial Services Ltd, said.
Among Sensex shares, Maruti Suzuki jumped the most by 3.26 per cent after it announced a 30 per cent increase in December car sales.
It was followed by Mahindra & Mahindra, Larsen & Toubro, Bajaj Finance, Tata Motors, IndusInd Bank, Asian Paints, Power Grid, HDFC Bank and Axis Bank which advanced by up to 2.45 per cent.
“The stock markets started on a positive note on the first day of 2025. The recovery was broad-based, while the sustainability of the trend will depend on the earnings growth in the third quarter, where the expectation is positive on a quarter-on-quarter basis,” Vinod Nair, head of research, Geojit Financial Services, said.
Most of the Asian and European markets were closed for New Year holidays.
At the forex markets the rupee continued to face rough weather: it opened steady at 85.61 amid the dollar index hovering near the 108 level, which is its highest in nearly two years.
Forex circles said that the domestic currency is expected to remain weak in the near term as a hawkish outlook from the Fed continues to weigh on the market.
Moreover, apprehensions over potential trade policies of Donald Trump are adding to the strength of the dollar. They added that there could be some respite to the rupee if there is a reversal in FII sales. This will depend on the upcoming quarterly results.
