Trading halts for 3 hours at NSE after technical snag
WARNING JOLT Market regulator Sebi seeks report from exchange after glitch
On Monday, trading at India’s largest stock exchange by volumes, National Stock Exchange of India Ltd (NSE) entered into a freak zone.
Owing to technical issues the trading at NSE was marred for three hours starting 9:30 am. Trading resumed only at 12:30 pm, after the exchange made two attempts to reopen them.
“NSE cash market segment did not function normally due to technical problem at the opening today and accordingly was closed,” said NSE in a statement.
The issue started in early hours. The benchmark Nifty and Sensex indices hit a fresh record high in opening trade on Monday, but soon after opening, NSE quotes were seen not moving in sync with BSE prices and trades were not going through.
The derivatives segment was working normally. However to ensure price parity the equity and derivatives segment, including currency derivatives trading was halted.
Capital markets regulator, Securities and Exchange Board of India (Sebi) has sought a detailed report from the exchange on what lead to the technical snag, as per two people familiar with developments.
“An interim report would be submitted by Monday evening. A detailed report would however take time,” said the first person.
These reports would also be sent to finance ministry.
Sebi said that NSE stopped trading on Monday morning, reportedly, due to a “technical glitch”. “Sebi is in touch with NSE and is closely monitoring the situation,” Sebi said.
NSE has referred the matter to its Standing Committee on Technology, comprising of public interest directors and technology experts for review of the problem and to approve measures to prevent recurrence of such glitches.
“The issue is being examined by the internal technical team and external vendors, to analyse and identify the cause which led to the issue and to suggest solutions to prevent recurrence,” the NSE statement added.
While the trading in nifty index resumed trade at 12:30 am the fluctuations in prices continued.
“A display issue of market prices was noticed. NSE is working to address the issue,” said an exchange official. Members trading in derivatives segment were given a 15-minute window to cancel outstanding orders, from 12:15pm to 12:29pm.
Nifty resumed trading at 9,727.65 points. Most sectoral indices traded with gains with public sector banks (PSBs), IT and pharmaceutical stocks leading the way.
The day ended with nifty trading 1.09% higher from the previous day’s closing at 9,771.05. While work was going on to restore normal trading earlier, brokers questioned why trading was not started from the disaster recovery site at Chennai and the unusual time taken by NSE to have a cohesive response.
The disaster recovery site is a replica of the primary site which ensures all exchange data is replicated on a real time basis, which should start if the trading is disrupted on the main segment.
NSE has sought clarification from rival BSE about a significant increase in the trading volume of its shares. A total of 5,941 shares of BSE worth ₹64.58 lakh were traded on the NSE. The 140year-old BSE Ltd, which got listed on NSE’s platform in February, said no price sensitive information is pending with it for furnishing to NSE. “Significant increase in volume has been observed in BSE Limited. The exchange, in order to ensure that investors have latest relevant information about the company and to inform the market place so that the interest of the investors is safeguarded, had written to the company,” NSE said. BSE responded that there is no such announcement or price sensitive information pending to be intimated by the firm to the stock exchange concerning its performance.