Closing Bell: Sensex Ends Flat in 2026’s First Trading Session; Nifty Holds Above 26,100 as NTPC and Eternal Gain 2% Each

The Indian equity markets opened the new year on a cautious note, with the Sensex settling flat in the first trading session of 2026. The Nifty 50 managed to stay above the 26,100 mark, supported by selective buying in power and infrastructure stocks. Despite global cues remaining mixed, domestic investors showed resilience, balancing profit-booking with fresh positions in defensive sectors.

Key Movers

  • NTPC: Shares of NTPC advanced nearly 2%, driven by optimism around renewable energy expansion and steady demand in the power sector.
  • Eternal: The stock rose 2% as investors bet on strong earnings momentum and sectoral tailwinds.
  • Banking & Financials: Largely remained range-bound, reflecting cautious sentiment amid expectations of monetary policy updates later this quarter.
  • IT Sector: Witnessed mild profit-booking after a strong run in December, with investors awaiting Q3 earnings guidance.

Sectoral Trends

  • Power & Energy: Outperformed the broader market, with NTPC leading the charge.
  • Infrastructure: Benefited from government spending expectations in the upcoming budget.
  • Consumer Goods: Traded sideways as holiday demand tapered off.
  • Pharma: Showed marginal gains, supported by defensive buying.

Investor Sentiment

Market participants remained watchful of global developments, including crude oil price fluctuations and U.S. Federal Reserve commentary. Domestic investors are also keenly awaiting signals from the Reserve Bank of India regarding interest rate direction. Analysts suggest that while the market may remain range-bound in the near term, selective opportunities in power, infrastructure, and options trading could provide attractive entry points.

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Conclusion

The first trading session of 2026 closed on a balanced note, with the Sensex flat and the Nifty holding firm above 26,100. Gains in NTPC and Eternal provided support, while broader indices reflected cautious optimism. As the year unfolds, investors will be closely monitoring policy cues, earnings announcements, and global developments to shape their strategies in India’s dynamic equity markets.

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Indian Tobacco Stocks Plunge as Government Imposes New Tax on Cigarettes

Indian tobacco stocks witnessed a sharp decline after the government announced a new tax on cigarettes, aimed at curbing consumption and boosting revenue. Shares of leading tobacco companies fell significantly in early trading, with investors expressing concern over the impact on margins and profitability. The move comes as part of the government’s broader public health strategy, while also serving as a fiscal measure to increase collections.

The tax hike is expected to raise cigarette prices across the board, potentially reducing demand in both urban and rural markets. Analysts believe that while premium brands may absorb some of the impact, mass-market products will face greater pressure, leading to volume declines.

Industry Impact

  • Revenue Pressure: Tobacco companies will likely experience reduced sales volumes, particularly in the low- and mid-priced segments.
  • Consumer Behavior: Higher prices may push consumers toward alternatives such as bidis or illicit products, impacting formal sector revenues.
  • Investor Sentiment: The announcement triggered immediate sell-offs, with tobacco stocks underperforming the broader market indices.
  • Regulatory Environment: The move underscores the government’s continued focus on discouraging tobacco consumption through fiscal and regulatory measures.

Broader Economic Context

The new tax aligns with India’s commitment to public health initiatives, including reducing smoking prevalence and meeting global health targets. However, the tobacco industry remains a significant contributor to government revenues, and balancing fiscal needs with health priorities continues to be a challenge.

Market experts suggest that while the short-term outlook for tobacco companies is negative, long-term strategies may involve diversification into non-tobacco businesses or premium product lines to offset declining volumes.

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Conclusion

The government’s decision to levy a new tax on cigarettes has sent shockwaves through the tobacco industry, with stocks tumbling and investors reassessing their positions. While the measure supports public health objectives, it poses significant challenges for tobacco companies in terms of profitability and demand. For market participants, staying informed and adopting strategic investment approaches will be crucial in navigating the evolving landscape.

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