India’s BSE Sensex plunged approximately 2,400 points, or 3%, during a 20-minute closing auction on August 27 before recovering to close down 539.35 points, or 0.70%, at 76,933.59. The index ended at its lowest level since August 19, while the Nifty 50 fell 116.90 points, or 0.48%, to 24,090.85. The volatility coincided with the first monthly derivatives expiry under the Bombay Stock Exchange’s new Closing Auction Session, which replaced the previous VWAP-based closing mechanism. HDFC Bank was among the biggest drags, falling 2.1% amid reports of a US class-action lawsuit and uncertainty over CEO Sashidhar Jagdishan’s tenure. The broader session began on a firmer note after strong Nvidia earnings lifted global risk appetite, but gains reversed as domestic pressure, persistent foreign-fund outflows and firm gold prices outweighed lower crude prices linked to Iran-Oman discussions on reopening the Strait of Hormuz. Market breadth was weak, with 1,341 stocks advancing, 2,160 declining and 118 unchanged. Metals led sectoral losses, while healthcare, pharmaceuticals and consumer durables gained. The episode highlighted the risks of thin liquidity when closing prices determine derivatives settlements, while SEBI had already barred two entities from CAS participation over alleged manipulation.