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India launches closing auction session, sending Nifty up into close
The SEBI framework runs daily from 3:15 PM to 3:35 PM, replacing the prior VWAP method for eligible cash-market stocks with derivatives and contributing to a sharp Nifty 50 jump near the bell.
India's benchmark stocks ended with a sharp divergence after the Securities and Exchange Board of India introduced a new Closing Auction Session mechanism for the equity cash market. On Monday, the Nifty 50 surged about 201 points to close at 24,773, up 1.60%, while the Sensex finished up 0.70% at 78,639, with both indices having largely tracked each other earlier in the session.
LiveMint Markets attributed the unusual late move to the new auction-based process, which became operational Monday and is designed to determine closing prices of eligible stocks. Instead of relying on the volume-weighted average price of trades from the last 30 minutes of continuous trading, the closing price is set through an auction that aggregates buy and sell interest into a single pool of liquidity.
SEBI said the Closing Auction Session is intended to make price discovery more transparent and robust, and it targets eligible cash-market stocks with derivative contracts. The auction is scheduled daily from 3:15 PM to 3:35 PM, immediately after the regular market close at 3:15 PM, and applies alongside the existing VWAP-based methodology for stocks not covered by the new rules.
The impact extended beyond the Nifty 50, with the Bank Nifty also moving sharply in the final moments of trading, jumping nearly 500 points to settle 1.7% higher at 58,247. SEBI expects the framework to improve execution efficiency for large orders, support fair settlement of derivatives and indices, and help passive funds transact at closing prices with lower tracking error.
Latest closeSensex 77,928.15 ▲0.3%