The gap between India’s benchmark indices expanded again on Thursday, reflecting market quirks and ongoing regulatory reforms amid evolving expiry day practices and increased liquidity measures.
The gap between the Sensex and the Nifty widened again on Thursday as India’s benchmark indices moved in opposite directions on the expiry day for Sensex weekly contracts, highlighting the continuing quirks of the closing auction system. By mid-afternoon, the Nifty was lower while the Sensex was modestly firmer, and that pattern was still visible at the close: the Nifty finished at 24,396, down 40 points, or 0.16%, while the Sensex ended at 78,080, up 114 points, or 0.15%.
That left a closing divergence of 0.31 percentage points, more pronounced than in the previous three sessions and close to the average gap seen since the closing auction session was introduced. The difference was also visible in several heavyweight stocks, with Bajaj Auto, UltraTech Cement and Trent showing noticeably different closing prices on the BSE and the NSE. A brokerage executive said the split tends to become more obvious when buying interest picks up, adding that even a small rise in cash-market activity can widen the gap between the two exchanges.
The Securities and Exchange Board of India has been pushing brokers to display cash-market values more prominently on their platforms in an effort to deepen participation and improve liquidity. According to people familiar with the matter, the regulator has also been holding regular meetings with brokers, including one on Thursday, to press for system upgrades and gather suggestions on the closing auction framework. Tuhin Kanta Pandey, SEBI’s chairman, said on Wednesday that most large brokers had begun showing indicative prices and that the rest were expected to follow by Friday, August 14. He also said mutual fund participation in the closing auction had climbed sharply, from about 5% to 7% to as much as 20% to 25%, while proprietary traders were more active around expiry.
The latest divergence comes against the backdrop of broader changes to India’s derivatives market. From August 28, 2025, NSE weekly Nifty expiries moved from Thursday to Tuesday, while BSE Sensex expiries shifted to Thursday, a rearrangement designed to separate the two major contracts and reduce overlap. SEBI has said the closing auction is intended to be transparent, but Pandey has also acknowledged that the new system is still not well understood by many market participants and may take time to gain wider traction.
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