Indian Stock Market Closing Auction Volumes Struggle To Gain Traction
· Business · LiveMint, Bloomberg, Economic Times
The newly introduced 15-minute closing auction session (CAS) on Indian stock exchanges has seen significantly lower trading volumes compared to previous continuous trading windows. Data from the National Stock Exchange (NSE) indicates that the CAS window accounts for just 1.59% of the average daily volume, trailing behind even the least active periods of the standard trading day. This system replaced the long-standing 30-minute Volume-Weighted Average Price (VWAP) model earlier this month to mitigate end-of-day price manipulation. While the transition aims to align Indian markets with global standards, domestic traders and retail investors have largely refrained from participating in the final 15-minute window. Some foreign traders have requested the introduction of market-making services to help improve liquidity during these sessions.
Why it matters
The lack of liquidity in the closing auction impacts price discovery for institutional and retail investors, potentially leading to increased volatility at the end of the trading day. Market participants now face a transition period as the exchange seeks to stabilize the new mechanism and encourage broader participation.
Read the original report — LiveMint
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