Indian benchmark indices moved in opposite directions during early trade on Tuesday, with the BSE Sensex gaining around 200 points to trade near 78,850, while the NSE Nifty slipped about 150 points to around 24,600. The unusual divergence between the two key indices prompted clarification from the National Stock Exchange (NSE), which said the movement was linked to the recently introduced Closing Auction Session (CAS) framework rather than any technical glitch.

New CAS Framework Behind Index Divergence

According to the NSE, the contrasting movement between the Sensex and Nifty is a result of the newly implemented Closing Auction Session mechanism for derivative-linked stocks.

The exchange explained that the revised framework has created temporary differences between spot and futures prices of certain securities, influencing index calculations differently. NSE stressed that the variation does not indicate any trading disruption or technical malfunction.

Global Cues Support Market Sentiment

Domestic equities also drew support from improving global factors, including softer crude oil prices, easing geopolitical tensions and continued foreign institutional investment into Indian financial assets.

Market participants said these developments helped sustain buying interest in select heavyweight stocks, supporting the Sensex despite weakness in parts of the broader market.

However, investor sentiment remained cautious as global markets continued to assess recent US Federal Reserve policy signals and corporate earnings, limiting broad-based gains.

Asian Markets Trade Lower

Major Asian markets traded in negative territory during the session.

South Korea's Kospi declined around 0.83%, Japan's Nikkei fell approximately 0.66%, while Hong Kong's Hang Sengslipped nearly 0.30%, reflecting cautious investor sentiment across the region.

Wall Street Ends Higher

Overnight, US equity markets closed firmly higher.

The Dow Jones Industrial Average gained 693 points (1.32%), while the Nasdaq Composite advanced 2.13%. The S&P 500 also ended the session 1.48% higher, supported by strong technology stocks and positive corporate earnings.

Foreign Investors Continue Buying

Foreign Institutional Investors (FIIs) maintained their buying momentum in Indian equities.

Over the past seven trading sessions, FIIs recorded net purchases of ₹7,805 crore, indicating renewed confidence in Indian markets despite global uncertainty. Domestic Institutional Investors (DIIs) also remained net buyers, providing additional support to market sentiment.

Although FIIs continue to show buying interest in the short term, their net activity over the past month remains in negative territory, reflecting intermittent profit-booking.

Previous Session Closed Higher

Indian benchmark indices had ended Monday's session on a strong note.

The Sensex surged 544 points to settle at 78,639, while the Nifty climbed 390 points to close at 24,774, supported by broad-based buying across banking, financial and heavyweight stocks.

Analysts expect market participants to closely monitor corporate earnings, global economic indicators, foreign fund flows and commodity prices for further direction in the coming sessions.