IMG INVESTIGATION · Policy
India’s closing auction changes the last 20 minutes: what investors should read differently
The new NSE mechanism is intended to improve closing-price discovery, but its first week has exposed a learning curve around indicative prices, liquidity and expiry-day moves.
CENTRAL FINDING
A late auction move is not automatically a new fundamental signal.
NSE’s Closing Auction Session became effective on August 3 for cash-market stocks with derivative contracts. The separate auction runs from 3:15 pm to 3:35 pm: a reference price is calculated first, orders are collected, and matching then determines the closing price. Non-CAS securities continue trading normally until 3:30 pm.
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The new NSE mechanism is intended to improve closing-price discovery, but its first week has exposed a learning curve around indicative prices, liquidity and expiry-day moves.
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