Indian bank stocks show widest exchange price gap in decades
Indian bank stocks saw unusually wide price gaps between the NSE and BSE during Thursday’s closing auction, with IndusInd Bank recording its widest exchange price difference in more than two decades. The divergence has intensified scrutiny of the new auction system amid thin liquidity, monthly expiry pressures and concerns over market manipulation.
Indian bank stocks witnessed the widest exchange price gap in decades on Thursday, signaling discord under the new closing auction system. IndusInd Bank Ltd. traded at 1,002.9 rupees on the National Stock Exchange of India (NSE), while its BSE counterpart saw a drop to 970 rupees, a difference of nearly 33 rupees. The gap was the largest in over two decades, with AU Small Finance Bank Ltd., IDFC First Bank Ltd., and Federal Bank Ltd. also showing significant discrepancies.
The BSE Bankex gauge briefly dropped 3.3% before rebounding to end 1.7% lower. Some smaller banks failed to recover amid insufficient liquidity and the expiry of the 14-member bank index. The divergence between NSE and BSE prices has sparked concerns about the auction system's functionality and potential for abuse. Traders and market participants are expressing reduced confidence, potentially deterring them from using the market.
The Securities and Exchange Board of India has already taken regulatory action against several firms for alleged price manipulation during the auction.
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