India's Nifty 50 index dropped more than 300 points Tuesday, reversing part of the sharp rally recorded in the previous session after exchanges introduced a new Closing Auction Session mechanism.
The S&P BSE Sensex fell 350 points in the same session. Both moves reflect the market's adjustment to the CAS framework on its second day of operation.
The mechanism prices stocks at the close through an auction-based process. On Monday, its debut triggered a late-session surge in index values during the final minutes of trading.
Tuesday's decline suggests traders unwound positions built around that mechanism-driven move. FMCG and bank stocks led the session's losses.
Market participants are monitoring how the CAS framework influences price discovery as the initial adjustment period continues.
