Indian stock market gained strong momentum on October 16 amid mixed signals from global markets. In early trade, the Sensex opened up 35.91 points, or 0.05 percent, at 74,351.52. While the Nifty opened with an increase of 36.15 points or 0.16 percent at 23,033.50. Both indices saw a slight decline after the market opened, but the buying soon returned. After this, the Nifty rose 148 points (0.64 percent) to 23,145.35 after crossing the 23,100 level. The Sensex also rose 443.22 points (0.59 percent) to 74,758.83. Stocks of broking and capital market companies like NSE, BSE, Grove and Angel One shined in this bullish market.
How will broking companies benefit?
A new decision by SEBI is behind the rise in broking shares on Friday. According to global brokerage firm Jefferies, the new structure of Closing Auction Session (CAS) will reduce market volatility on the expiry day. This will directly benefit those brokers whose orders stay below the old levels. However, the exchanges’ premium turnover has returned to earlier levels, so the scope for a big jump in earnings may be limited. Jefferies advises investors to buy shares of Grove. SEBI launched this system in January this year to set a transparent closing price of shares. The consultation paper released on September 12 has been revised after receiving more than 20,000 suggestions.
After 3:30 pm the operation will be done in three phases
Under the new rules, the closed auction session will run from 3:30 pm to 3:40 pm on all trading days. Most of the changes will come into effect from December 7, 2026, while the rules for transferring incomplete limit and iceberg orders will come into effect from February 8, 2027. This ten minute session will be completed in three stages. The reference price will be fixed in the first minute i.e. between 3:30 pm to 3:31 pm and the orders for the regular session will be transferred. After this, both limit and market orders can be placed from 3:31 to 3:36 pm. Only limit orders will be taken in the last four minutes, while market orders cannot be changed or cancelled. The order window will close at any random time between 3:38 pm and 3:40 pm.
New Mathematics of Settlement with Derivatives Trading
On normal days, trading in index derivatives will continue until 3:45 pm, but contracts that expire at 3:30 pm on that day will stop trading. Stock derivatives will remain open till 3:45 pm on the day of expiry as well. The post-close session in the cash market will run from 3:50 pm to 4 pm, where trades will take place at closing prices. The settlement price of expiring index and stock derivatives will now be determined by the volume-weighted average price (VWAP) of the last 30 minutes of the cash market of all exchanges. During this period, the exchanges will continuously publish the estimated prices and send the data to the clearing corporation.
A new system for advancing pending orders
Rules for transfer of pending orders from regular trading to closing auction have also been clarified. Except for stop-loss and orders outside the specified price band, all remaining limit orders will be forwarded. Unfilled iceberg orders falling within the price band will be converted into full public limit orders. If merchants wish, they can opt out of this change at the time of placing an order. Orders from the regular session will have priority over new limit orders, but transferred iceberg orders will rank below regular limit orders. Changing the iceberg order in an auction will change its time priority. SEBI has asked exchanges and clearing corporations to update their rules of procedure (SOP) and systems within seven days.
