India's equity benchmarks were muted on Thursday in the first trading session of 2026, as gains in heavyweights Reliance Industries and Mahindra & Mahindra countered a decline in ITC following the announcement of a new tax on cigarettes.
The Nifty 50 index (.NSEI), opens new tab rose 0.03% to 26,136.8, while the BSE Sensex index (.BSESN), opens new tab gained 0.02% to 85,239.28, as of 10:20 a.m. IST. Eight of the 16 major sectors rose.
Reliance Industries (RELI.NS), opens new tab, the second heaviest stock on the benchmarks, added 1%, starting the New Year on a positive note.
Shares of the conglomerate jumped 29% in 2025, its best year in five, on strength in retail and telecom segments and steady profitability in the oil-to-chemicals segment. The auto index (.NIFTYAUTO), opens new tab rose 0.4% as monthly sales data for December trickled in.
Mahindra & Mahindra (MAHM.NS), opens new tab gained 1% after posting a rise in December auto sales. Tractor maker Escorts Kubota (ESCO.NS), opens new tab and bus maker SML Mahindra (SMLM.NS), opens new tab climbed 1.6% and 4.7%, respectively, on robust sales.
On the other hand, cigarette makers ITC (ITC.NS), opens new tab and Godfrey Phillips (GDFR.NS), opens new tab fell 5.8% and 10%, respectively, after the government imposed excise duty on cigarettes from February.
ITC dragged the fast-moving consumer goods index (.NIFTYFMCG), opens new tab 2.2% lower.
"Benchmarks are expected to remain sideways with selective buying amid thin trading volumes due to New Year holidays across global markets," said Siddhartha Khemka, head of research of wealth management at Motilal Oswal Financial Services.
Quarterly earnings, India-U.S. trade negotiations and the union budget will decide the near-term market trajectory, Khemka said.
India's broader small-caps (.NIFSMCP100), opens new tab and mid-caps (.NIFMDCP100), opens new tab lost 0.5% and 0.2%, respectively. Among other stocks, Piccadily Agro (PICA.NS), opens new tab climbed 12% after the sugar company started commercial production at its Chhattisgarh unit.
Blue Dart (BLDT.NS), opens new tab advanced 5.3% after the goods and services tax authority dropped a 4.21 billion rupees tax demand.
