Nifty Hits All Time High: Five Factors Driving Market Rally In Week One Of 2026

India's broader benchmark index Nifty 50 surged to hit an all-time high, fuelled by gains in financial and energy stocks such Coal India and Hindalco industries Ltd.

The 50-stock index gained as much as 0.7% to hit 26,328.55 level, continuing the streak of highs into its third session. Intraday, it hit 26,340.Earlier, Nifty recorded a record high on December 1, at 26,325.8 points. In the previous year, Nifty gave a return of 10.5%. 

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Key Factors Behind Nifty's Record Surge In 2026

A pertinent reason behind Nifty50's Record High are upbeat corporate updates that have uplifted earnings expectations and sentiment.

"India heads into 2026 stronger than most emerging markets, with improving domestic earnings and improving balance sheets driving confidence," the Edelweiss Mutual Funds equities outlook report noted. “Early signs of an earnings upgrade cycle point to a more durable market rally beyond index highs. Large caps are trading at -20x while Mid and Small caps are trading at-24-27x translating into -37% and -22% premiums over the Nifty 50,” it said.

Brokerage firm advising investors to increase exposure to Indian equities as it offers a potential combination of reasonable valuations and start of the earnings upgrade cycle.

Fifteen of the 16 major sectors advanced. High-weight bank stocks led gains, with the bank index NSE BANK rising 0.7%. HDFC Bank Ltd., ICICI Bank Ltd. and Reliance Industries Ltd. contributed the most in bolstering Nifty50 to record its all-time high today. Automotive stocks pushed the sector index up 1.2%. Hero MotoCorp gained 1.6% and TVS Motor surged 1.5% after reporting solid December sales.

Market breadth remained supportive, with 40 stocks advancing and 10 declining in the Nifty pack.