Glitch gives stocks an extended run

„Bourses trade till 5 pm; indices soar

The National Stock Exchange on Wednesday faced a major technical glitch, leading to a halt in trading for more than three hours from 11.40 am, as the bourse had faced connectivity issues with its server.

Surging volumes both in cash and futures & options segments before the monthly derivatives expiry on Thursday might also have contributed to the technical glitch, said market experts.

On Tuesday, the traded value of NSE’s cash segment was Rs 75,979 crore against rival BSE’s Rs 4,520 crore.

As traders had several open positions a day before the monthly equity derivatives expiry, the halting of trading led to a panic situation among the market participants as there was no communication either from the NSE or the market regulator as to when trading would be resumed while the BSE was functioning normally.

Around 1 pm the NSE spokesperson stated that the exchange’s multiple telecom links with two service providers were having issues with their links, due to which there was an impact on NSE systems and that they were working on restoring the systems.

Finally, the market hours had to be extended till 5 pm to close the open positions in the market.

The NSE finally

reopened for trade at 3.30 pm after ironing out the glitches and trade continued till 5 pm uninterrupted.

The extended trading hours resulted in sharp gains for the market ahead of the futures & options contracts expiry.

The Nifty-50 closed 274 points, or 1.86 per cent, higher at 14,982 while the Sensex gained 1,030 points to close at 50,781.

“Due to technical glitch, the option buyers (especially ‘put’ option buyers) had to pay the price because we witnessed premiums falling drastically due to the loss of time. For call buyers (as well as put writers), it may not have impacted much because once the market resumed trading for a short period, market had a sharp upsurge which could have definitely benefitted them. But for other counter party, prices just diminished rapidly,” said Sameet Chavan, technical and derivatives analyst, Angel Broking.

Marketmen questioned the bourse’s decision to halt trade, as only index feeds were not updating.

“The biggest question in this whole issue is why was the entire market shut just because index feeds were not refreshing? Feeds for underlying contracts were fine and so was order matching, so why shut down the entire market?” asked Jimeet Modi, CEO & founder, Samco Ventures.

“A similar issue in index feeds had happened a few months ago, but trading was not completely halted. Instead, trading went on with the glitch in index prices that day. Sebi and NSE need to quickly look at alternatives here,” Modi said.