Freak 6,500% Spike in Gold ETF Spurs India’s NSE to Scrap Trades
Fresh trades will resume on Monday.
(Bloomberg) -- India’s National Stock Exchange on Friday canceled trades in two exchange-traded funds run by Axis Mutual Fund following a freak spike in their prices.
The Axis Gold ETF soared more than 6,500%, and Axis Nifty ETF -- which tracks the NSE Nifty 50 Index -- jumped over 740% despite very modest moves in their underlying assets on the day.
Axis Mutual Fund had decided to reduce the face value of the two funds to boost liquidity starting July 24. It noticed “anomalies” in their prices on the NSE after trading began at 9:15 a.m. local time and asked the exchanges to take “corrective action,” the money manager said in a late evening statement.
On its part, the NSE in a statement said it canceled all trades in the funds that occurred prior to 9:50 a.m. without providing further details. Fresh trade in both ETFs will resume on Monday, Axis Mutual said.
©2020 Bloomberg L.P.