Nifty50 drops as BSE Sensex climbs amid new closing auction rules
The Nifty50 slipped while the BSE Sensex rose after the National Stock Exchange introduced a Closing Auction Session, which the exchange says caused the opposite moves.
During Tuesday’s opening, the Nifty50 dropped 159.25 points (0.64%) to 24,615, while the BSE Sensex rose 166.15 points (0.21%) to 78,805. The National Stock Exchange explained that the divergence stems from the recently implemented Closing Auction Session, which runs from 3:15 pm to 3:35 pm and operates with a distinct order book from continuous trading. Because no continuous order matching occurs between 3:15 pm and 3:30 pm, the index displayed during the auction remains static, leading to differing values for the two benchmarks.
The new system, introduced under SEBI guidance, determines closing prices by an equilibrium price that maximizes executable volume, giving priority to market orders. Participation in the inaugural session was strong, with 515 members submitting orders for 56,773 unique PAN holders, up from the pre-open figures the previous day. The change also means that closing prices for stocks with derivatives are no longer based on the last 30 minutes of VWAP but on the auction outcome.
Why it matters
Investors need to understand the new auction process, as it can cause benchmark indices to move independently and affect price discovery.
In this story