The volume was nearly 40 times the mechanism’s post-launch average and accounted for 21 per cent of the exchange’s cash-market turnover.
MUMBAI:
Approximately $4.1 billion worth of shares changed hands during the National Stock Exchange’s closing auction on Monday as passive funds implemented MSCI’s quarterly index rebalancing.
The NSE said turnover during the approximately 20-minute session was nearly 40 times the average recorded since the auction mechanism was introduced in August. It represented 21 per cent of the exchange’s total cash-market volume for the day.
The final volume is a material update to the stock-price movements reported at the market close. It shows that institutional investors used the new mechanism at substantial scale during its first major index-rebalancing test.
MSCI added Laurus Labs, Lenskart, Adani Energy Solutions and Groww to its global standard index. Balkrishna Industries, SBI Cards and Astral were removed, while Reliance Industries’ weight was reduced and Eternal’s increased.
Reliance moved from a 0.6 per cent gain before the auction to a 0.8 per cent closing loss. Eternal erased an intraday fall of approximately 3 per cent, while Adani Energy Solutions declined 10.4 per cent.
The auction presently covers stocks with derivatives contracts. Consequently, price effects were more muted in Lenskart and Groww, which were outside that group.
Large auction volume is not evidence of a malfunction. It reflects the concentration of index-linked orders at the closing price. Exchanges and the Securities and Exchange Board of India will nevertheless examine settlement data and any unusual order patterns after the session.
