Late Auction Surge Lifts Indices Despite Sanctions

Indian benchmark indices concluded Tuesday's trading session on a strong positive note, coinciding with the monthly derivatives expiry. The day began with pressure due to new US sanctions on Iran, but a significant reversal occurred in the final hour. This turnaround was attributed to a notable decline in crude oil prices and the impact of a newly implemented closing auction window.

This closing auction, part of SEBI's new regime introduced on August 3, determined the final closing prices for F&O stocks and unexpectedly boosted the Nifty by 75 points and the Sensex by 126 points. The session saw the Nifty 50 reach 24,334, a gain of 115.50 points, and the BSE Sensex settle at 77,656, up 286 points.

Earlier market sentiment was affected by Washington's sweeping sanctions targeting Iran, aimed at isolating Tehran. However, concerns eased as the measures were perceived as less severe than anticipated. Brent crude fell over 3 per cent to around $89 a barrel, and WTI dropped to near $82, alleviating India's import cost worries. The Indian rupee also strengthened against the dollar, closing at 95.41.

Sectorally, Healthcare, Consumer Durables, and Pharmaceuticals led the gains, while Energy and Metals lagged. Looking ahead, market participants will closely monitor Nvidia's earnings, US consumer confidence data, and developments in US-Iran tensions, alongside crucial technical levels for the Nifty. The overall market participation remained subdued, as indicated by a slight fall in NSE cash-market turnover.