Indian shares up as oil eases; Nifty derivatives expiry spurs volatility

Indian shares reversed losses on Tuesday as oil fell to a one-week low, while volatility persisted ahead of the first monthly Nifty 50 derivatives expiry under the new closing-auction system (CAS).

“Monthly expiry-related rollovers and positioning led to sharper-than-usual price swings, particularly during the final hour of trading,” Hariselvan Radhakrishnan, founder and CEO of HST Wealth, said.

The Nifty rose 0.48% to 24,334.55 and the BSE Sensex added 0.37% to 77,656.09. They were up 0.2% each ahead of the closing auction.

“The early sessions (under CAS) saw teething issues, including the gap between regular close and auction-determined close on August 3, which understandably unsettled traders,” said Rajesh Singla, CEO and fund manager at Alpha AMC and Planify.

“The real test will be the next MSCI rebalancing on August 31.”

Crude prices fell 3.2% to $89.20 per barrel as traders shrugged off the latest U.S. sanctions campaign against Iran.

Markets still got short-term support from Washington’s shift to economic sanctions from military escalation, analysts said, adding oil’s path in coming sessions will be crucial for global equities.

Twelve of the 16 major sectors logged gains. The broader small-caps fell 0.1%, while mid-caps gained 0.5%.

Financials and IT rose 0.3% and 0.6%, reversing losses in the final hour of trade.

Among stocks, Hindustan Copper fell 7.2% after the government offered to divest up to a 6% stake in the company at a 10.5% discount to its last close.

Federal Bank and Jana Small Finance Bank fell about 3% and 1.9%, after CNBC-TV18 reported Jana’s promoter may sell its entire 16.9% stake to Federal Bank. Federal Bank told exchanges there was no material event requiring disclosure in connection with the report.