Sensex gains 170 points as Nifty slips; LIC shares down 8%

Markets opened mixed on Tuesday as the Sensex rose and the Nifty fell, unwinding Monday's CAS-driven spike. Analysts said the divergence was a technical aberration, while FII buying kept the near-term outlook positive.

In Short

• Markets opened mixed with Sensex up 172 points and Nifty down 164 points
• New Closing Auction Session caused unusual Nifty surge on Monday
• Sensex stocks Asian Paints and Tata Steel gained, Infosys and HUL declined

Markets opened on a mixed note on Tuesday, with the BSE Sensex gaining over 170 points while the Nifty 50 slipped sharply as investors unwound the previous session's closing-auction driven rally.

At 9:25 am, the Sensex was up 172.14 points, or 0.22%, at 78,811.17, while the Nifty 50 was down 164.40 points, or 0.66%, at 24,609.75.

The divergence comes a day after Indian exchanges introduced the new Closing Auction Session (CAS) for stocks in the futures and options (F&O) segment, which triggered an unusual late surge in the Nifty on Monday.

Most sectors traded in the red in early trade, with 15 of the 16 sectoral indices declining. Nifty IT was among the biggest laggards, falling 0.95%, while Nifty Realty dropped 1.24%. Nifty Financial Services lost 0.64% and Nifty Auto fell 0.66%.

Broader markets were also mixed. The Nifty Smallcap 100 index rose 0.42%, while the Nifty Midcap 100 slipped 0.19%.

Among Sensex stocks, Asian Paints gained 1.31%, Tata Steel rose 1.22%, Kotak Mahindra Bank advanced 1.08%, Trent climbed 0.97%, Bajaj Finance added 0.94% and Adani Ports rose 0.90%. On the downside, Hindustan Unilever fell 0.71%, Infosys lost 0.44%, Titan slipped 0.31%, Maruti declined 0.19% and TCS edged 0.08% lower.

The rupee opened almost unchanged at 95.3550 against the US dollar compared with the previous close of 95.3375.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said Monday's sharp rally in the Nifty was largely a technical aberration caused by the new closing auction mechanism and was expected to normalise.

"The 390-point spurt in the Nifty yesterday caused primarily by the new Closing Auction Session (CAS) for determining the closing prices of stocks in the F&O segment is expected to normalise today. The sharp spike in Nifty vis-a-vis Sensex was an aberration caused by the new CAS, and therefore, investors need not attach much importance to this one-day aberration," he said.

He added that the broader market outlook remains positive, supported by improving economic indicators and renewed foreign investor interest.

"The significant positive is the return of FIIs to the Indian market. FIIs have been buyers in the cash segment during the last five days and consequently this has triggered sharp short-covering. In the near term, the market is likely to rally further led by the large-caps," Vijayakumar said.

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