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Indian bank shares close at widest NSE-BSE price gap in decades
IndusInd Bank closed at 1,002.9 rupees on NSE after a 20-minute auction window, versus 970 rupees on BSE, a near 33 rupee spread that highlights concerns about the new closing auction system.
Some Indian bank stocks closed at sharply different prices on the country’s two main exchanges, underscoring dislocation linked to the new closing auction mechanism, according to LiveMint Markets citing Bloomberg coverage.
IndusInd Bank Ltd. finished at 1,002.9 rupees on the National Stock Exchange of India after the 20-minute auction window ended, but fell more than 3% to 970 rupees on BSE during the same session. The nearly 33 rupee difference was the widest in more than two decades, and other banks including AU Small Finance Bank, IDFC First Bank, and Federal Bank also saw sizable discrepancies in closing values.
The BSE Bankex gauge showed a drop of 3.3% at one point during the auction before ending 1.7% lower, with some smaller banks failing to rebound amid thin liquidity and the monthly expiry of the 14-member bank index. On Friday, the gauge jumped 1% at close, after the earlier volatility episodes.
Regulators and market participants have raised concerns about how the auction works, including whether prices can be manipulated and whether traders can effectively model auction outcomes. LiveMint Markets reports that the Securities and Exchange Board of India barred two firms, including a unit of JPMorgan Chase & Co., over alleged auction price manipulation.