Asian Paints and Bank of Baroda rise ahead of their inclusion in the 50-share Nifty index on Friday.
Changes in the Nifty constituents have "always" led to a volatile trading session the day before the change because of the action of index trackers, says Kotak Institutional Equities.
"In order to reduce tracking error, majority of the trading needs to be deferred close to the effective date after considering the liquidity of the constituents in question," Kotak says.
Asian Paints will garner a 0.96 weighting on the index, while Bank of Baroda will comprise 0.79%, Kotak estimates.
*By contrast, ITC and Reliance Industries will see a reduction of 0.11% and 0.13% respectively in their weightings, as per Kotak.
Reliance Communications and Reliance Power will be excluded from the index as of Friday.