Bank Nifty falls 700 points from Monday close as CAS-driven rally reverses; Yes Bank, Axis Bank trade lower
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NSE recorded ₹39,718 crore turnover during Monday's Closing Auction Session, around 42 times the previous day's level, amid MSCI index rebalancing.
Bank Nifty slipped on Tuesday, September 1, giving up most of the gains from Monday's sharp rise during the Closing Auction Session (CAS), even as the broader market remained in positive territory.
The banking index was down 0.7% at 57,625 around 12:05 pm, nearly 400 points below its previous close of 58,025. It fell to an intraday low of 57,316.60, taking the decline from Monday's closing level to more than 700 points.
Monday's closing level had been boosted by a sharp move during the CAS. Bank Nifty was at 57,397 around 3:15 pm but ended the session at 58,025 after the closing auction, gaining 529 points, or 0.92%.
Tuesday's fall brought the index closer to the levels seen before the closing-auction move. The day's low was also below Bank Nifty's 3:15 pm level from Monday.
The decline in banking stocks came even as the main indices traded higher. Around 12:05 pm, the Sensex was up 250 points, or 0.33%, at 77,207, while the Nifty was 45 points higher at 24,125. Market breadth was almost evenly divided, with 1,853 stocks rising and 1,904 falling.
Banking stocks across the board were under pressure. Yes Bank fell nearly 3%, while Axis Bank declined more than 2%. IndusInd Bank, Federal Bank and SBI were down between 1.7% and 1.9%.
ICICI Bank and IDFC First Bank also fell more than 1% each. Kotak Mahindra Bank was among the few gainers, rising nearly 2%, while PNB gained more than 1%. HDFC Bank and Bank of Baroda were marginally higher.
Other banking indices also remained weak. The Nifty PSU Bank index fell 0.64%, while the Nifty Private Bank index was down 0.50%.
What Drove Monday's Spike
Monday's unusual move came on the first MSCI index-rebalancing day since the NSE introduced the closing-auction mechanism.
NSE recorded ₹39,718 crore of turnover during the August 31 CAS, around 42 times the turnover recorded in the previous trading session. The CAS accounted for around 22% of the exchange's total cash-market turnover for the day.
The Closing Auction Session is a separate 20-minute mechanism used by the NSE to determine the official closing prices of eligible stocks. It was introduced in August, replacing the earlier method of calculating closing prices using the weighted average of trades during the final 30 minutes of regular trading.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
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