Sensex traded higher while Nifty slipped as markets digested Monday's closing auction-driven rally and tracked mixed global cues.
Analysts said Monday's sharp gains were largely a one-off impact of the new Closing Auction Session (CAS), with focus now shifting back to fundamentals.
Sustained FII buying, steady rupee and strong domestic indicators continue to support market sentiment despite cautious global trends.
Nifty Declines After Monday's CAS-Driven Rally; Sensex Trades In Green
Analysts expect Monday's closing auction-driven surge to normalise as investors shift focus to FII inflows, strong domestic fundamentals and cautious global sentiment
Nifty Declines After Monday's CAS-Driven Rally; Sensex Trades In Green
Summary
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Indian benchmark indices opened on a mixed note on Tuesday as investors digested Monday's sharp closing auction-driven rally while tracking cautious global cues and continued foreign institutional investor (FII) buying.
The Sensex traded 126.41 points, or 0.16%, higher at 78,765.44 at 9:16 am after opening at 79,132.97. The Nifty, however, declined 167.10 points, or 0.67%, to 24,607.20 after opening at 24,703.90.
Among the Nifty 50 stocks, Hindalco, Adani Ports, Jio Financial Services and Eternal were the top gainers, while Grasim, Titan, Bajaj Auto and Hindustan Unilever led the losses.
Global Markets Remain Cautious
Asian markets traded mixed as investors weighed Wall Street's technology-led rally against lingering geopolitical tensions in West Asia and concerns over the sustainability of the AI-driven rally.
Japan's Nikkei 225 declined 0.8%, while the Topix fell 0.5%. South Korea's Kospi slipped 1.9%, whereas Hong Kong's Hang Seng gained 0.48%.
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US futures were little changed after the S&P 500 and Nasdaq 100 rose more than 1% overnight, supported by gains in technology shares after Palantir Technologies raised its full-year revenue and profit guidance.
Rupee Holds Steady
The rupee opened nearly unchanged at 95.33 against the US dollar, compared with the previous close of 95.34, as investors continued to monitor developments surrounding the US-Iran conflict.
The domestic currency has recovered from levels near 96.70 to around 95.12 over the past month, although gains have been capped by persistent importer demand for dollars.
CAS Effect Likely To Normalise
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said Monday's 390-point jump in the Nifty was largely driven by the introduction of the new Closing Auction Session (CAS) for F&O stocks and should be viewed as a one-off technical adjustment rather than a change in market fundamentals.
He said the more significant trend is the improving domestic backdrop, supported by strong credit growth, healthy auto sales and higher GST collections. Vijayakumar added that sustained FII buying over the past five sessions has triggered short covering and is likely to support further gains in the broader market, led by large-cap stocks
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