Equity benchmarks closed sharply higher on Wednesday, with the Sensex rising 487.20 points or 0.60 per cent to 82,344.68, and the Nifty gaining 167.35 points or 0.66 per cent to settle at 25,342.75, driven by strong buying in defence and public sector stocks ahead of the Union Budget.
emerged the top gainer on the Nifty50, surging 9.21 per cent to ₹454.25, followed by , which jumped 8.18 per cent to ₹268.23. gained 5.27 per cent to ₹445.20, while Eterna rose 5.06 per cent to ₹266.70 and advanced 4.28 per cent to ₹1,003.00. On the losing side, declined 4.55 per cent to ₹1,133.40, fell 4.22 per cent to ₹2,512.00, dropped 2.39 per cent to ₹14,880.00, slipped 1.89 per cent to ₹1,608.00, and lost 1.59 per cent to ₹960.00.
“Nifty opened on a strong note but quickly lost momentum, leading to range-bound trade for the major part of the day, before a sharp surge towards the last hour of the day led to the index closing 0.66 per cent higher at 25,343,” said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities. “On the daily chart, the index has formed a bullish candle with a relatively long lower wick, indicating strong buying interest at lower levels.”
The broader markets significantly outperformed frontline indices, with the Nifty Midcap 100 surging 1.66 per cent to 58,438.60 and the Nifty Smallcap 100 rallying 2.26 per cent to 16,790.95. The market breadth remained heavily positive, with 2,866 stocks advancing against 1,378 declines on the BSE, while 86 stocks touched 52-week highs, compared to 261 at 52-week lows.
The sectoral performance was mixed, with the Nifty Defence Index emerging as the top gainer, rising nearly 7 per cent on expectations of a capital expenditure push in the upcoming Union Budget. “Better than expected Q3 results from Bharat Electronics supported the positive momentum in the defence space,” noted Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services. The Nifty CPSE Index gained over 5 per cent, while Nifty Financial Services rose 1.02 per cent to 27,335.20, and Nifty Bank advanced 0.66 per cent to 59,598.80. However, Nifty FMCG and Pharma emerged as the top sectoral losers.
“Investor sentiment remained buoyant after India and the European Union sealed a landmark free trade agreement, described as the ‘mother of all deals’,” said Gaurav Garg of Lemonn Markets Desk. “The pact is expected to create a market of nearly two billion people and covers tariff reductions on 99 per cent of Indian exports to the EU and over 97 per cent of EU exports to India.”
In commodities, gold traded strongly positive with gains of ₹6,500 or nearly 4 per cent, touching ₹1,64,100 on the MCX. “While rates are expected to remain unchanged, the focus is firmly on the Fed’s statement and forward guidance on future rate cuts, which is keeping gold elevated,” said Jateen Trivedi, VP Research Analyst at LKP Securities. “However, after such a sharp and extended up-move, gold is entering an overheated zone where volatility can increase.”
The rupee maintained a relatively flat trajectory, trading near 91.75–91.77 against the dollar. “Rupee found support also due to the secondary market showing strong positive momentum, largely driven by Pre-Budget positioning,” Trivedi added.
Looking ahead, market participants expect volatility to remain elevated, with the Union Budget scheduled for February 1, 2026, and the US Federal Reserve’s policy decision due tonight. “The forthcoming FY27 Union Budget is expected to balance the growth momentum and fiscal consolidation, with focus on higher capex across sectors such as defence, infrastructure, affordable housing, power, capital goods,” said Khemka. Technical analysts see immediate resistance for Nifty in the 25,450–25,500 zone, while support is placed at 25,200–25,150 levels.