4 days ago
Indian Bank Stocks Show Record Exchange Price Gaps
Indian stocks can trade on two large exchanges.
Usually, the same stock should finish at almost the same price on both exchanges.
On Thursday, some bank stocks ended at very different prices.
IndusInd Bank had a gap of nearly 33 rupees between the two exchanges.
This was the biggest gap in more than 20 years.
The problem appeared after India introduced a new closing auction system on August 3.
Traders said the system makes it difficult to know the final price or take advantage of price differences.
Regulators are also investigating whether some firms misused the auction process.
IndusInd Bank closed at 1,002.9 rupees on the National Stock Exchange of India and 970 rupees on BSE.
The nearly 33-rupee difference was the widest reported gap in more than two decades.
AU Small Finance Bank, IDFC First Bank, and Federal Bank also posted notable price discrepancies.
The BSE Bankex gauge briefly indicated a 3.3% decline before ending 1.7% lower on Thursday, then rose 1% on Friday.
Market participants cited uncertain auction pricing, thin liquidity, and regulatory concerns over possible manipulation.
- Who
- Indian banks, traders, exchanges, and the Securities and Exchange Board of India were involved.
- What
- Several bank stocks closed at sharply different prices on the National Stock Exchange of India and BSE.
- Where
- India’s two largest stock exchanges, the National Stock Exchange of India and BSE.
- When
- The discrepancies were reported on Thursday, after the auction system launched on August 3; the BSE Bankex rose 1% on Friday.
- Why
- The article attributes the gaps to uncertainty during the closing auction, thin liquidity, bank-index expiry, and concerns about possible manipulation.
Key facts
- Largest reported gap
- IndusInd Bank differed by nearly 33 rupees between the two exchanges.
- IndusInd NSE close
- 1,002.9 rupees.
- IndusInd BSE close
- 970 rupees.
- Auction duration
- 20 minutes.
- BSE Bankex Thursday close
- Down 1.7%, after briefly indicating a 3.3% decline.
- BSE Bankex Friday close
- Up 1%.
- Regulatory action
- The Securities and Exchange Board of India barred two firms, including a JPMorgan Chase unit, from the market over alleged auction-price manipulation.
Quotes
Varun Khandelwal
Founder of Gurugram-based proprietary trading firm Bullero Capital
“I trade multiple markets globally and haven’t seen such a dislocation where the same stock closes with as much as a 3% gap on different exchanges”
livemint.com
“Traders and other market participants are losing confidence — this kind of volatility may make them avoid this market”
livemint.com
Sources
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