Mumbai, Aug. 3 -- India's two benchmark stock indices usually move in tandem. On Monday, they didn't. While the NSE Nifty surged 1.6%, the BSE Sensex gained just 0.7%. It was a rare divergence, but not a glitch.













The unusual trend followed the first day of the closing auction session (CAS) for futures and options (F&O) stocks, a new Sebi-mandated mechanism for determining closing prices that replaced the long-standing volume-weighted average price (VWAP) system.

The auction triggered a nearly 200-point surge in the Nifty in the final two minutes of order closing, leaving traders puzzled by the gap not only between the Nifty and the Sensex, but also between Nifty index's underlying stocks and their futures.

The pricing discre...