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Sensex rose, Nifty 50 fell as India markets split on closing rules
The day’s divergence followed a shift in India’s equity closing mechanism, with SEBI’s closing auction starting Aug. 3 for F&O stocks and set to run daily from 3:15 PM to 3:35 PM.
Indian equities showed an unusual split on Tuesday, Aug. 4, with the Sensex up more than 0.50% intraday while the Nifty 50 dropped more than 1%. Market participants cited recent technical effects tied to changes in how India’s closing prices are determined.
According to LiveMint Markets, the previous session ended with the Sensex rising 544 points, or 0.7%, to 78,639, while the Nifty 50 added 391 points, or 1.6%, to close at 24,774.30. Vipin Kumar, AVP-Research at Globe Capital Market, said the latest gap appeared to reflect a normalisation of Monday’s closing anomaly, rather than a broad change in fundamentals.
The divergence comes as India’s market regulator, Securities and Exchange Board of India (SEBI), has moved to an auction based closing mechanism to improve end-of-day price discovery and make closing prices more resistant to manipulation. SEBI said the reform was announced in a circular dated Jan. 16, 2026, and came into effect on Aug. 3, 2026 for stocks in the futures and options segment.
Under the new framework described by LiveMint Markets, a Closing Auction Session runs daily from 3:15 PM to 3:35 PM after the regular market closes at 3:15 PM, with investors able to place market and limit orders during a 20-minute window. The order entry window shuts at a random time between 3:28 PM and 3:30 PM, intended to deter last minute gaming, while existing VWAP based methodology continues for other stocks.
Latest closeSensex 78,094.64 ▲0.2%