Equity ETFs are passive investment instruments that are based on indices and invest in securities in same proportion as the underlying index.
Axis Gold Exchange Traded Fund (ETF) surprisingly shot up 6,553 percent and Axis Nifty ETF surged 741.37 percent despite normal course of trading in all other asset classes on July 24 due to a technical glitch on the National Stock Exchange (NSE).
The closing trade in Axis Gold ETF took place at Rs 3,482.85 per unit against previous close of Rs 52.35 and Axis Nifty ETF ended at Rs 1,151 against previous close of Rs 136.80, before the exchange halted trading in both scrips.
But the same percentage of spike was not see in its underlyings - the Nifty, which closed with a loss of 21.3 points, and the gold, which gained nearly a percent on July 24.
In fact, on the BSE, Axis Gold ETF closed at Rs 52.24, up 1.22 percent.
Equity ETFs are passive investment instruments that are based on indices and invest in securities in the same proportion as the underlying index.
The last tick was seen at 9:48 am and then NSE halted trading in both ETFs at 9:50 am. The exchange decided to cancel all trades that occurred till 9:50 am.
"Members are requested to note that trades in Axis Gold and Axis Nifty till 09.50 am will be cancelled by the exchange. Trading in these securities shall resume with the revised price band post this activity and the same will be notified in advance," a NSE spokesperson said.
On July 24 the Axis Nifty ETF traded with volume of 4,268 shares, valued at Rs 46.53 lakh, while Axis Gold ETF traded with volume of 7,231 shares, valued at Rs 279.47 lakh.
Both ETFs started trading ex-split with effect from July 23. The face value of Gold ETF has been reduced from Rs 100 per share to Re 1 per share. In the case of Nifty ETF, the same has been reduced from Rs 100 per share to Rs 10 per share. Accordingly, the trading price gets reduced in the same proportion along with creation of additional shares.
"Each creation unit consists of 1 lakh units of Axis Gold ETF (each unit of Axis Gold ETF will be approximately equal to one 0.01 gram of gold) and cash component, if any," Axis MF said in a circular published on the BSE on July 13.
In the previous session, July 23 or ex-split day, Axis Gold ETF as well as Nifty ETF closed with 20 percent gains at Rs 52.35 and Rs 136.8 on the NSE.