New Year, New Highs. Big Trend Ahead ?

Markets Overview

The year has begun on a strong and encouraging note, with markets closing at a new all-time high right in the opening week. Several sectors are now displaying healthy price structures, suggesting that participation is broadening beyond just a few index heavyweights. While FII selling has continued, the intensity has clearly reduced, which itself is a positive signal. At the same time, a larger global narrative is starting to take shape — one where markets are increasingly accepting that interest rates eventually have to move lower. That shift in expectation is important, because it lays the groundwork for renewed flows into emerging markets, potentially becoming a meaningful theme as we move through 2026.

Precious metals like gold and silver paused this week, consolidating after their recent sharp moves. This pause does not change the larger trend but reflects normal digestion after strong rallies. The most prominent domestic development, however, came from the tobacco space, where government action on higher excise duties and increased GST triggered sharp reactions. The announcement caused immediate pressure on major tobacco stocks and became the single biggest talking point of the week, reminding investors how swiftly policy risk can play out in specific sectors even when the broader market is strong.

Latest Daily Byte

It is a fantastic way to kickstart the new year as the first weekly candle close of 2026 has reached a new all-time high mark. This weekly performance of approximately 1% is the best the market has seen since mid-November. This surge comes after a consolidation period of about 15 to 16 months.

Nifty has been hovering near its all-time high for the last two or three months, and every time selling pressure emerged, a strong buying force neutralized it. Momentum has now shifted in favor of the bulls.

This traction is primarily driven by strong expectations surrounding the upcoming Q3 earnings season and optimism regarding the budget due in February. Only time will tell if this will be a long-term rally similar to those seen after consolidations in 2021-22 and 2023-24. While the post-Covid era saw significant rallies following consolidation, it remains to be seen if 2026 is starting the next major leg of growth.

Rebalance Update for the week