CAS swings: Nifty’s indicative price jumps 500 points in seconds, closes higher than pre-CAS level

ETMarkets.com

Sensex was trading at 73,509 when the market entered the CAS session, with normal trading in stocks included in the F&O segment coming to an end for the day. The benchmark index’s indicative price immediately recovered all losses to briefly move into the green, rising near 73,872 before erasing all gains and closing in the red at 73,710. This is however 200 points higher than the pre-CAS level.

Nifty’s CAS swing was even more wild. Just before the CAS session, Nifty was trading at around 22,738. Right after CAS began, Nifty’s indicative price jumped more than 2% or over 500 points to trade near 23,240. The index later pared some gains to close at 22,811.

While both Sensex and Nifty closed in the red, they recovered sharply after falling nearly 1% each as multiple headwinds including soaring bond yields, rising oil prices and persistent FII selling spooked investors.

What lies ahead for Dalal Street?

Indian equities gave up strong early gains as elevated crude prices and continued FII selling overshadowed optimism surrounding India-US trade negotiations, said Vinod Nair, Head of Research, Geojit Investments. He noted that the profit-booking intensified across autos, financials, metals and realty, reflecting concerns over inflation, and margin pressures, while IT showed relative resilience amid improving earnings visibility and renewed investor appetite for the sector.

Resilient Q2 earnings and robust domestic institutional flows remain important market supports, but weak breadth and persistent foreign selling point to continued caution, he said, adding that the near-term direction will depend on the breadth of earnings delivery, progress on trade negotiations and foreign flows, with durable moderation in crude, global yields and currency volatility crucial for market stability.

Technical view on Nifty

Nifty faced selling pressure near its 38.2% Fibonacci retracement level during the ongoing mean-reversion rally, said Vatsal Bhuva, Technical Analyst at LKP Securities. Monday’s developments and Wednesday’s price action indicate weakening momentum, while the potential hidden bearish divergence suggests a possible continuation of the prevailing downtrend, he said.

Following the closing auction session (CAS), the index managed to close near its 20-DMA around 22,800. A cautious stance is advisable, with 22,650–22,700 acting as a crucial support zone around the 200-WMA, according to the analyst. “If the index breaks below this zone, accumulated positions from the relief rally should be reviewed or reduced. Immediate resistance is placed at 23,000."