NIFTY50 hits all-time high, NIFTY Bank hits new record; here are key factors behind the market rally on January 2

The Indian equity benchmarks continued their gaining streak on the second day of 2026. The NIFTY50 index surged to record high on the back of a broad-based buying interest. The NIFTY50 index surged as much as 186 points to hit record high of 26,332.15.

Meanwhile, the measure of banking stocks, NIFTY BANK, on the National Stock Exchange (NSE) also touched its new all-time high of 60,152 on Friday, January 2.

The 30-share SENSEX rose as much as 518 points to hit an intraday high of 85,706.49, 452 points short of its record high of 86,159.02 it made on December 1.

Strong cues from Asian peers

Indian equity markets took cues from their Asian peers, as most of the Asian markets ended higher on Friday.

Hong Kong's Hang Seng jumped 2.2% to 26,189.79 on a strong rally in tech shares.

E-commerce giant Alibaba climbed 3.2%, and search engine and technology company Baidu jumped 7.5% after it said it plans to spin off its artificial intelligence computer chip unit Kunlunxin, which would list shares in Hong Kong in early 2027. The plan is subject to regulatory approvals.

Markets were still closed in Tokyo, Shanghai, Thailand, and New Zealand.

South Korea's Kospi picked up 1.5% to 4,277.94, while the S&P/ASX 200 in Australia edged 0.2% higher, to 8,727.30.

Asian shares have been supported by expectations that growth in the use of artificial intelligence will spur demand for computer chips and other items needed to build out data centres and other infrastructure.

Recent manufacturing data for much of the region has been relatively weak, though trade has remained resilient.

Heavyweights witness buying interest

The up move in Friday's session was supported by buying interest in index heavyweights like HDFC Bank, Reliance Industries, ICICI Bank, NTPC, Bajaj Finance, Infosys and Maruti Suzuki. They alone contributed over 450 points towards gains in the SENSEX.

In the NIFTY50 basket of shares, Coal India was the top gainer; the stock advanced 6.32% to ₹435.75 after the Maharatna PSU firm permitted direct participation of foreign coal buyers in e-auction.

In a regulatory filing, Coal India said that, effective January 1, 2026, it has for the first time allowed coal consumers from neighbouring countries such as Bangladesh, Bhutan and Nepal to directly participate in its Single Window Mode Agnostic (SWMA) auctions to import coal from India.

CIL’s board has cleared the decks recently for this move, tweaking the scheme’s mechanism in the SWMA auction.

NTPC advanced 3.88% after reports suggested that the company is exploring multiple international collaborations in the area of technology and fuel to push its nuclear ambitions to diversify energy generation.

NTPC is looking to set up around 30 GW of company-owned nuclear projects across various locations in the country in line with the government's ambition of having 100 GW nuclear capacity by 2047.

Hindalco, Trent, Jio Financial Services, Bajaj Finance, Power Grid and Maruti Suzuki also rose 1.5%-3.3%.

On the flipside, ITC, Nestle India, Axis Bank and Tata Consumer Products were among the top losers in the NIFTY50 index.

Sectoral landscape

Buying was visible across the board, as all the major sector gauges, barring the measure of FMCG shares, were trading higher, led by the NIFTY Realty index's 1.5% gain. NIFTY PSU Bank, Metal, Consumer Durables, Auto, Financial Services and Bank indices also rose between 0.6% and 1.2%.

Broader markets were also witnessing buying interest as the NIFTY Midcap 100 index rose nearly 1% and the NIFTY Smallcap 100 index jumped 0.7%.

The overall market breadth was extremely positive, as 2,671 shares were trading higher while 1,462 were trading in the red on the BSE.