Mkts snap 4-day rally amid new closing auction session

Sensex and Nifty on Monday ended with an unusual aberration after stock exchanges introduced the new auction mechanism

PTI

mumbai

Snapping a four-day gaining streak, benchmark stock indices Sensex and Nifty closed lower on Tuesday following the introduction of a new auction mechanism for shares having futures and options contracts.  

Paring early gains, the 30-share BSE Sensex declined by 210.08 points, or 0.27%, to settle at 78,428.95.  

The 50-share NSE Nifty closed lower by 159.40 points, or 0.64%, at 24,614.90 after trading in the negative territory throughout the day.  Market benchmarks traded on a mixed note in the early session on Tuesday, a day after the introduction of the new auction mechanism. Sensex and Nifty on Monday ended with an unusual aberration after stock exchanges introduced the new auction mechanism. 

The NSE recorded a turnover of ₹1,542.2 crore on the second day of the closing auction session on Tuesday, while the turnover on the BSE stood at ₹9.35 crore.  

The closing auction session in the equity cash segment became operational on Monday, introducing a new auction-based mechanism for determining the closing prices of eligible stocks in a move aimed at making the price discovery process more transparent and robust. Generally, movement in both the benchmark indices is in sync. 

"The introduction of the closing auction session for futures and options stocks has added a new layer of volatility to benchmark indices, with Tuesday's trade reflecting an early adjustment to the revised market structure. After Monday's auction lifted closing prices in several index heavyweights, investors spent much of today's session recalibrating positions as prices gravitated back toward levels established during continuous trading," Hariselvan Radhakrishnan, founder and CEO of HST Wealth, a research analyst firm, stated.