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Informist, Monday, Sept. 21, 2026

 

By Rajesh Gajra

 

MUMBAI – The closing auction session turnover on the National Stock Exchange Monday fell to its lowest level since Aug. 3, when the Securities and Exchange Board of India-mandated closing auction mechanism kicked off on the NSE and BSE. The turnover in Monday's session was INR 8.42 billion, lower than Aug. 20's level of INR 9.11 billion.

 

The NSE has the predominant share of closing auction session turnover, with the BSE accounting for only 1-5% of the aggregate turnover on both exchanges. Monday, the BSE, too, recorded very low closing auction session turnover of INR 235 million. Even that turnover was achieved largely on account of a large turnover of INR 156 million in the shares of just one company, Bharat Petroleum Corp. Ltd. The closing auction session is applicable only to stocks in which derivatives trading is permitted. Currently there are 210 such stocks.

 

In August, except for the last trading day, the average daily closing auction session turnover on NSE was INR 11.95 billion. On Aug. 31, the reshuffle and rebalancing of MSCI's global indices had taken effect. Due to its impact on Indian stocks, global passive funds adjusted their portfolios by buying or selling during the closing auction session on the NSE, raising the session turnover to a large INR 397.18 billion.

 

SEBI had on Sept. 12 issued a consultation paper on the closing auction session, proposing changes to the mechanism as well as equity derivatives settlement price methodology. In the current month, prior to Monday and excluding two index rejig event days of Sept. 4 and Friday, the average daily closing auction session turnover on the NSE was INR 15.14 billion, higher than August's average.

 

But Monday's all-time-low closing auction session turnover of INR 8.42 billion appears to have cast a shadow over expectations of a rise in participation of all investor categories following hopes raised by SEBI's proposals in the consultation paper. Public and market participants can give their feedback to SEBI's proposals by Oct. 3 after which the market regulator will decide the next course of action.

 

The main proposal in the consultation paper pertains to changing the methodology for settlement prices for equity derivatives contracts from one based solely on the closing prices fixed by the closing auction session to one based on a blend of the volume weighted average price of the final 30 minutes of the continuous trading session of the cash market and the closing auction session-determined closing price. SEBI has been compelled to make this and other proposals due to the negative impact of the low volumes in the closing auction session and other characteristics of the session on the equity derivatives trade.  End

 

Edited by Rajeev Pai

 

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