Nifty Closes Higher on Expiry Day Driven by Crude Retreat and Closing Auction Session

Mumbai: Benchmark indices closed firmly in the green on Tuesday, marking the monthly derivatives expiry day. The session initially opened under pressure following fresh US sanctions on Iran, but reversed sharply in the final hour as crude oil prices fell. Additionally, a newly introduced auction window delivered a late jolt to closing prices.

The Nifty 50 ended the session at 24,334, registering an increase of 115.50 points or 0.48 per cent. Meanwhile, the BSE Sensex gained 286 points, or 0.37 per cent, to settle at 77,656. Tuesday marked the first monthly expiry under the Securities and Exchange Board of India's (SEBI) new Closing Auction Session regime, which was introduced on August 3. Under this framework, Futures and Options (F&O) stocks stop continuous trading at 3.15 pm, and a 15-minute auction window determines the final closing price.

The day's auction alone pushed the Nifty up 75 points and the Sensex up 126 points from their respective 3.15 pm levels. Nandish Shah, Deputy Vice President at HDFC Securities, noted that the Nifty staged an intraday reversal of over 200 points to close at its highest level since August 14, aided by the Closing Auction Session.

The morning trade began in the red after Washington announced sweeping new sanctions targeting Iran and its trading partners. However, markets quickly recalibrated as the measures appeared less severe than initially feared. Brent crude fell over 3 per cent to approximately $89 a barrel, hitting a one-week low, while WTI dropped near $82. The rupee strengthened by 32-34 paise to close at 95.41 against the US dollar, supported by Reserve Bank of India intervention, while the Dollar Index slipped below the 99 mark.

Sectoral performance varied across the board. Healthcare, Consumer Durables, and Pharmaceuticals emerged as the top performers, while IT, Infrastructure, Media, and PSU Banks also closed in positive territory. Conversely, Energy, Metals, and Private Banks lagged. Among individual Nifty constituents, Adani Enterprises, Max Healthcare, and Apollo Hospitals led the gains, while HDFC Life, Cipla, and ONGC underperformed.

Despite the positive headline close, broader market participation remained subdued, with NSE cash-market turnover falling 4 per cent compared to the previous session. Market breadth was narrow with an advance-decline ratio of 0.94. The Nifty Smallcap 100 slipped 0.10 per cent, whereas the Nifty Midcap 100 gained 0.54 per cent to reach a fresh all-time high. The India VIX declined by nearly 4.25 per cent.

Looking ahead, market participants are tracking a busy global calendar, including Nvidia’s quarterly earnings, US consumer confidence data, Federal Reserve meeting minutes, and developments regarding US-Iran tensions and crude oil prices. Technically, analysts are monitoring whether the Nifty can sustain above the 24,300–24,400 resistance band.

"Tuesday's market movement highlights how external macro factors like crude oil prices and currency fluctuations continue to dictate short-term sentiment. Furthermore, the market's reaction to the new SEBI Closing Auction Session demonstrates how structural regulatory changes can significantly impact closing indices on expiry days. Investors should closely monitor upcoming global earnings and macroeconomic data before making major deployment decisions." — Dr. Shishir Gupta, Founder & CEO, StartupLanes