The new Closing Auction Session for F&O stocks caused a 390-point Nifty spike Monday. Tuesday's divergence shows normalization underway, says Geojit's Vijayakumar.
Indian stocks opened mixed Tuesday as traders processed the first full session under the new Closing Auction Session for shares with futures and options contracts. The 30-share Sensex edged up 97 points to 78,736.20, while the 50-share Nifty slipped 173.95 points to 24,600.35.
The divergence followed Monday's close, when the Nifty surged 390.70 points, or 1.60%, against the Sensex's 544.39-point, or 0.70%, gain. That gap was an artifact of the CAS, said VK Vijayakumar, chief investment strategist at Geojit Investments. The new mechanism, introduced Monday, sets closing prices through an auction for F&O stocks. Vijayakumar called the Nifty's spike an aberration and said it should normalise in the coming sessions.
Tuesday's early trade reflected that normalisation. Among the Sensex winners were Asian Paints, Tata Steel, Trent, Bajaj Finance, Bharat Electronics and Kotak Mahindra Bank. Lagging were Infosys, Hindustan Unilever, HDFC Bank and Tata Consultancy Services.
Foreign institutional investors bought equities worth ₹922 crore on Monday, exchange data showed. Asian markets were mostly lower, with South Korea's KOSPI, Japan's Nikkei and Hong Kong's Hang Seng in the red. US markets ended sharply higher Monday. Brent crude rose 1.36% to $84.91 a barrel.
The CAS affects how closing prices are determined for the roughly 200 stocks that trade F&O contracts. The auction aims to improve transparency and reduce manipulation. Vijayakumar said investors should not read too much into the one-day divergence. The broader trend remains positive, he added.
Among the laggards, Infosys and Unilever carry Alpha Scores of 57 (Moderate), while HDFC Bank scores 37 (Mixed), according to AlphaScala data. The differential impact of the CAS on individual stocks may reflect liquidity and positioning differences, traders said.
The aberration is expected to fade as the market adapts to the new closing mechanism, Vijayakumar said.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.