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Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
A month on, CAS has only amplified volatility, manipulation and confusion rather than containing them.
In the past few weeks, the Indian markets have thrown up two clear signs of price distortion on expiry days—sharp volatility around the BSE Sensex monthly expiry and a confirmed instance of manipulation on 13 August
Start with the former. This was on 27 August, the first monthly derivatives expiry after the new closing auction session (CAS) norms kicked in. At the start of the closing window at 3.15 pm, the Sensex was at 77,100, only to plunge over 2,000 points to 74,988 by 3.23 pm. It then swung back just as sharply, recovering nearly 2,000 points to close at …
Thinly traded listed entities have long served as breeding grounds for stock manipulation, hurting investors. The regulator, the NSE and BSE now want to fix things by focusing on efficient delisting.
The regulator’s shift to an auction-based close was meant to curb manipulation and mirror global markets. Instead, it has run into thin participation that is only amplifying distortions and volatility.
As India’s largest stock exchange heads to the public markets, it may need to rethink its excessive reliance on transaction revenue.
