Shanghai Stock Exchange. Photo: iStock
Shanghai Stock Exchange. Photo: iStock

The Shanghai Stock Exchange announced it has adjusted the closing trading mechanism to set daily closing prices before the market closes, The Paper reported.

According to the new mechanism, from 2:57 pm to 3 pm, the stock market will enter the call auction stage.

All prices bid by investors during this period of time will be treated equally. There is no need to trade according to the principle of time priority and price priority. Instead, the price of the stock is determined according to the principle of maximum volume.

The SSE currently adopts a continuous auction trading mechanism to finalize the closing stage. This means the daily closing price is determined by the average weighted price of the trading volume.

Under the existing mechanism, the closing price is easily affected by  large-scale order declarations at the end of the day, and fails to serve as a benchmark price.

The closing trading mechanism of bonds, bond repurchases, funds and other trading products will remain unchanged.