Nifty, Sensex Today: Markets End Lower as Expiry Volatility Offsets Banking Rally; Sensex Falls 417 Points

3 Sep 2026 , 06:37 PM

Indian equity markets ended lower on Thursday, September 3, as sharp volatility towards the close erased most of the gains seen earlier in the session. The expiry-day swings were particularly visible in the Sensex, which slipped more than 400 points by the close, while the Nifty 50 settled below the 24,000 mark.

The Nifty 50 closed at 23,873.45, down 41 points, or 0.17 per cent. The index opened at 23,997.95 and touched an intraday high of 24,025.40 before ending at its day’s low.

Market breadth was tilted towards the bears, with 30 of the 50 Nifty stocks ending in the red, while 20 closed higher.

The BSE Sensex had a considerably weaker session. The index ended at 76,152.86, down 417.49 points, or 0.55 per cent, against its previous close of 76,570.35. The Sensex opened at 76,724.95 and moved to an intraday high of 76,924.48 before falling to its closing low.

Sensex expiry brings sharp swings towards market close

Thursday’s session was marked by heightened volatility as the Sensex expiry coincided with the final stages of trading.

The index was trading around 76,791 levels at about 11 am but gradually gave up its gains through the day. The selling intensified during the final stretch, with the Sensex falling from around the 76,500 level to nearly 76,150 in the last 10 minutes of trade.

The sharp move towards the close also brought the Closing Auction Session into focus.

The Closing Auction Session is the final phase of trading used to determine the official closing price of eligible stocks. During this period, buy and sell orders are matched through an auction mechanism rather than through continuous trading. On an expiry day, when traders and institutions adjust positions and manage derivatives-linked exposure, order imbalances can sometimes lead to sizeable moves in the final minutes.

This appeared to amplify the late-session volatility on Thursday. The sharp fall in the Sensex during the closing stretch meant that the index ended significantly below the levels seen during the morning session.

RBI forex inflows trigger banking stocks rally

Banking stocks were among the major highlights of Thursday’s session, supported by the unexpectedly strong foreign currency inflows mobilised through the Reserve Bank of India’s special measures.

The RBI’s special USD-INR forex swap facility generated a total of $136.38 billion in foreign currency inflows, significantly higher than market expectations. FCNR(B) deposits accounted for $127.23 billion of the inflows as of August 31.

Overseas foreign currency borrowings contributed $5.26 billion, while external commercial borrowings added another $3.89 billion.

The large mobilisation is expected to improve liquidity conditions in the banking system while also strengthening India’s external buffers. The development provided a boost to investor sentiment towards banks.

The Nifty Bank index was up 0.91 per cent at 57,694.95 around 9:40 am, while the Nifty Private Bank and Nifty PSU Bank indices gained 1.17 per cent and 1.14 per cent, respectively.

However, several banking stocks surrendered part of their early gains by the close.

Among the major gainers in the Nifty 50, Axis Bank ended at ₹1,267, up 1.04 per cent, while HDFC Bank gained 0.83 per cent to ₹706.65. Adani Ports was the top Nifty 50 gainer, rising 2.02 per cent to ₹1,706.50.

Other stocks among the day’s gainers included Tata Consumer Products, which rose 0.71 per cent to ₹1,019.20, and BEL, which gained 0.70 per cent to ₹408.60.

Midcap banking stocks also see strong buying

The positive sentiment extended beyond the large private-sector banks.

Bank of Maharashtra jumped around 4 per cent to ₹85.25, while Punjab & Sind Bank gained 3 per cent to ₹23.31. Bandhan Bank advanced 2.32 per cent to ₹165.45, and Bank of India climbed 2.04 per cent to ₹145.40.

Four banking stocks featured among the top gainers on the BSE Midcap index, highlighting the broader nature of the banking-sector buying.

The rally was also visible across the broader market in early trade. Around 9:40 am, the Sensex was up 303 points, or 0.40 per cent, at 76,873.51, while the Nifty 50 had gained 96 points, or 0.40 per cent, at 24,010.90.

At that point, market breadth was strongly positive, with 2,232 stocks advancing against 914 declines.

Rupee strengthens as forex inflows support sentiment

The unexpectedly strong foreign currency mobilisation also provided support to the Indian rupee.

The rupee strengthened as much as 0.7 per cent to around ₹94.27 against the US dollar, marking its strongest level in more than a month.

The RBI had introduced the special swap facility in June amid concerns over capital outflows, rupee weakness and elevated crude oil prices. While the FCNR(B) deposit window closed on August 31, the facility for external commercial borrowings and overseas foreign currency borrowings remains open until December 31.

The stronger-than-expected inflows are therefore being viewed as a positive development for India’s liquidity and external financing position.

Global cues offer some relief

Global market cues were supportive during the early part of Thursday’s session.

Asian equities gained after US President Donald Trump played down the possibility of a prolonged conflict with Iran. Brent crude, meanwhile, eased to around $95.50 a barrel after rising sharply for three consecutive sessions.

The India VIX also declined nearly 5 per cent to 11.02, signalling relatively lower expectations of near-term market volatility.

Despite these positive factors, domestic markets could not hold on to their early gains, with expiry-related trading activity and late-session selling weighing on the benchmarks.

Adani Ports leads Nifty gainers; Bajaj Auto among top losers

Adani Ports emerged as the strongest performer among the Nifty 50 stocks, gaining 2.02 per cent to close at ₹1,706.50.

Axis Bank rose 1.04 per cent, followed by HDFC Bank at 0.83 per cent. Tata Consumer Products and BEL also ended higher.

On the other hand, Bajaj Auto was the biggest Nifty 50 loser, declining 1.73 per cent to ₹11,920. Tech Mahindra fell 1.54 per cent to ₹1,598, while Trent declined 1.29 per cent to ₹2,815.60.

Cipla and Mahindra & Mahindra also remained under pressure, falling 1.28 per cent and 1.25 per cent, respectively.

Solar Industries shares jump on acquisition buzz

Solar Industries India was another stock in focus on Thursday.

The company’s shares jumped ₹900, or 4.37 per cent, to close at ₹21,500 amid reports and market buzz that the company could be preparing to acquire an industrial explosives company in Africa.

An announcement could come as early as Friday, according to the market chatter. Investors, however, will be watching for an official announcement from the company before drawing firm conclusions about the potential transaction.

Sectoral performance: Realty and Metal gain, IT slips

Sectoral performance was mixed during the session.

The Nifty Realty index gained 1.51 per cent, while the Nifty Metal index advanced 0.89 per cent. Banking stocks were among the key drivers of the positive sentiment during the early session.

On the weaker side, the Nifty IT index declined 1 per cent, while the Nifty FMCG index slipped 0.46 per cent.

What drove the Indian stock market today?

Thursday’s market action was shaped by two contrasting forces. On one side, the RBI’s unexpectedly large foreign currency mobilisation provided a strong positive trigger for banks, the rupee and overall liquidity sentiment.

On the other, expiry-day positioning and intense activity towards the close resulted in sharp swings in the benchmark indices.

The Nifty 50 ultimately ended 41 points lower at 23,873.45, while the Sensex fell 417 points to 76,152.86.

The sharp reversal from the morning highs serves as a reminder that strong sector-specific triggers do not necessarily translate into a higher market close, particularly when derivatives expiry and end-of-day order flows come into play.

For investors, the RBI’s foreign currency inflows remain the key positive development to watch, while the behaviour of the benchmarks around the 24,000 level on the Nifty and 76,000 level on the Sensex could remain important in the next trading session.

Disclaimer – The stock/s and indices mentioned in this article are discussed solely for informational and educational purposes. It should not be construed as investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult a financial advisor before making any investment decisions. Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.