CAS wild swing: Sensex soars 1,000 points on expiry day but ends only 138 points higher

The Indian stock market closed in the green on Thursday, with Sensex and Nifty soaring up to 1.4% during the closing auction session (CAS) before paring most of the gains by the time of closing, overall ending in the green to snap a three-day losing streak.

After trading in the red, Sensex’s indicative price briefly soared nearly 1,000 points to 75,708 amid sharp volatility on its weekly-expiry day, while Nifty 50 surged 330 points to 23,762. The benchmark indices pared most of the sharp gains by the end of CAS. Sensex closed 138 points higher at 74,903, while Nifty 50 ended 46 points higher at 23,478.

Power Grid and Axis Bank shares gained around 2% each to lead gains on Sensex, while UltraTech Cement, NTPC, TechMahindra and Bharti Airtel shares rose more than 1% each. HDFC Bank, L&T, Kotak Mahindra Bank and Bajaj Finance shares meanwhile gained nearly 1% each. Bucking the trend, HCLTech shares dropped over 2%, while those of Tata Steel, Trent, ITC, Adani Ports, BEL and Maruti Suzuki fell around 1% each.


Broader markets meanwhile remained in the red, with Nifty Midcap 100 and Nifty Smallcap 100 indices falling up to 0.4%. Notably, the closing auction session only affects stocks that are included in the F&O segment, less common in the broader markets.

Among the sectors, Nifty Financial Services, Nifty Bank and a few other indices closed in the green with up to 0.5% gains. Nifty Metal meanwhile dropped 0.65%. The overall market breadth remained negative, with NSE seeing 2,079 declines and 1,466 advances, while 121 stocks remained unchanged.

What lies ahead for Dalal Street?

While Dalal Street took a sigh of relief, caution is warranted. The prospect of synchronised monetary tightening strengthened as higher crude prices and prolonged geopolitical tensions reinforced energy-led inflation concerns, said Vinod Nair, Head of Research at Geojit Investments. He added that investors now await key US inflation data for cues on the rate trajectory. Meanwhile, rising global bond yields, coupled with concerns over a potential yen carry trade unwind amid expectations of a BOJ rate hike and a stronger yen, are likely to keep capital flows into emerging markets under pressure.

The domestic market endured a choppy session on expiry day amid weak Asian cues, as investor focus remained closely tethered to the volatility in crude prices, he said. “Although the strong August equity fund flow data and the moderation in the SIP stoppage ratio lent support to the markets, sentiment was tempered by the depreciating rupee and firming domestic bond yields,” according to the analyst.

More to come...