Stock Market

  Capital Fort Financial Services AMFI-registered Mutual Fund Distributor | ARN-350415 Market Update · Investor Education Closing Auction Session Explained: New Stock Market Timings from 3 August 2026 A simple guide to the new end-of-day auction for eligible shares, how the closing price will be discovered and what investors and traders should know. Updated: 1 August 2026 Reading time: approximately 10 minutes Language: English   For years, Indian investors were familiar with regular equity trading continuing until 3:30 PM, followed by the calculation of the day’s closing price. From 3 August 2026, that process changes for a selected group of shares. India’s stock exchanges will introduce a Closing Auction Session, commonly called CAS, for eligible securities in the equity cash segment. In the first phase, it will apply to shares on which derivative contracts are available. The change affects both the final part of the trading day and the way the official closing price of these shares is determined. Key takeaways Effective date 3 August 2026 Initial coverage Cash-market shares with derivative contracts CAS window 3:15 PM to 3:35 PM Equity derivatives close 3:40 PM What is a Closing Auction Session? A Closing Auction Session is a special period near the end of the trading day in which the exchange determines a security’s official closing price through an auction. During normal continuous trading, compatible buy and sell orders are matched as they become available. CAS works differently. The exchange first collects eligible buy and sell orders and then determines one equilibrium price at which the maximum possible quantity can be traded. Eligible orders are matched at this single equilibrium price, which becomes the official closing price for that security on the exchange for the day. Which shares will come under CAS? CAS will not initially apply to every listed share. In the first phase, it will apply to securities in the equity cash segment on which derivative contracts are available on any recognised exchange. Securities that are not covered by CAS will continue to trade through the normal continuous session until 3:30 PM, and their closing prices will continue to be calculated under the existing methodology until further guidance is issued. Important: CAS applies to the equity cash segment. It does not directly apply to derivative contracts, although equity derivatives trading hours and certain stock-futures price-band processes are being aligned with the new framework. New stock market timings from 3 August 2026 Market segment or session Revised timing or process CAS-eligible shares in the cash market Continuous trading ends at 3:15 PM Closing Auction Session 3:15 PM to 3:35 PM Shares not covered by CAS Continuous trading continues until 3:30 PM Equity derivatives, including index and stock F&O Trading continues until 3:40 PM Cash-market post-closing session 3:50 PM to 4:00 PM The key distinction is that continuous trading in CAS-eligible cash-market shares ends at 3:15 PM, while the corresponding stock and index derivative contracts can continue trading until 3:40 PM. Broker cut-offs may differ: Intraday square-off, risk-management and order-placement cut-offs can be earlier than exchange closing times. Investors and traders should check the applicable timings with their broker. How will the 20-minute CAS window work? 3:15–3:20 PM Reference-price calculation and transition Continuous trading ends for CAS-eligible shares. The exchange calculates and disseminates the reference price and transitions the security from the continuous session to CAS. Order entry is not allowed during this period. 3:20–3:25 PM Order Entry Period I Market and limit orders may be entered. Both market and limit orders may be modified or cancelled during this stage. 3:25–3:30 PM* Order Entry Period II Only limit orders may be entered, modified or cancelled. Market orders can no longer be modified or cancelled. The order-entry window closes randomly at some point between 3:28 PM and 3:30 PM. Up to 3:35 PM Order matching and confirmation The exchange determines the equilibrium price, matches eligible orders and communicates trade confirmations. Unexecuted CAS orders are cancelled by the exchange after the matching phase. *The system-driven random closure takes place during the final two minutes of the second order-entry period. How is the CAS reference price calculated? For a CAS-eligible cash-market security, the reference price is based on the volume-weighted average price of trades executed between 3:00 PM and 3:15 PM. If no trade takes place during that period, the security’s last traded price during the day is used. If the security has not traded during the entire day, the previous trading day’s closing price may be used, with the applicable adjustment for a corporate action. The reference price is not automatically the final closing price. It is used as a starting reference for the auction, including the applicable CAS price band. How is the equilibrium price selected? The exchange first identifies the price at which the maximum quantity of shares can be executed. When more than one price allows the same maximum executable quantity, the exchange considers the price with the lowest unmatched order quantity. If a tie still remains, preference is given to the price closest to the reference price. A simplified example Possible price Cumulative buy quantity Cumulative sell quantity Executable quantity ₹100 1,800 1,000 1,000 ₹101 1,500 1,400 1,400 ₹102 1,100 1,700 1,100 In this illustration, ₹101 allows the highest executable quantity: 1,400 shares. Therefore, ₹101 would be selected as the equilibrium price, subject to the exchange’s full matching rules. If an equilibrium price is not discovered, the applicable reference price becomes the closing price. If the security has not traded during the day and no equilibrium price is determined, the latest available closing price is considered. What happens to orders placed before 3:15 PM? Unexecuted limit orders from the continuous trading session may be carried into CAS when they are within the revised price band. These carried-forward limit orders retain their original timestamp and receive higher time priority than limit orders entered during CAS. The following orders are not carried into CAS: Stop-loss orders Iceberg or disclosed-quantity orders Orders priced outside the applicable CAS price band Immediate-or-cancel orders