Sebi seeks explanation from NSE over outage
The regulator asks NSE to explain why trading on the bourse did not migrate to a disaster recovery site
MUMBAI: Markets regulator Sebi on Wednesday asked the National Stock Exchange (NSE) to explain why trading on the bourse did not migrate to a disaster recovery site after facing connectivity issues.
It also advised the NSE to carry out a detailed root cause analysis of the “trading halt” witnessed at the exchange on Wednesday.
The NSE should “explain the reasons for trading not migrating to the disaster recovery site” and asked it to submit a report at the earliest, according to an official statement. A disaster recovery system helps as a plan-B in times of distress to ensure that activity is not affected.
Trading across segments was halted at 11.40am on Wednesday due to “issues with the links with telecom service providers”, according to the NSE.
The bourse said it depends on two telecom service providers for connectivity, and both failed simultaneously resulting in the outage.
The Securities and Exchange Board of India (Sebi) said it was in constant touch with NSE officials and continued to monitor the situation closely.
“The NSE was also advised to keep the market participants updated with the evolving developments,” it said.
The “trading halt” continued till 3.30pm. In view of the exceptional situation arising out of it, it was decided to extend the trading hours from 3.30 pm to 5.00 pm at the NSE, the BSE and the Metropolitan Stock Exchange of India.
Equity benchmark Sensex soared 1,030.28 points and the Nifty rallied over 270 points on Wednesday, tracking strong buying in financial stocks, after trading hours were extended.
After resumption of trade at 3.45pm, NSE Nifty zoomed 274.20 points or 1.86% to end at 14,982.
Similarly, the 30-share BSE index settled 1,030.28 points or 2.07% higher at 50,781.69.
Axis Bank was the top gainer in the Sensex pack, surging around 5 per cent, followed by HDFC twins, ICICI Bank, Bajaj Finance and SBI.
On the other hand, PowerGrid, Dr Reddy’s, TCS and Asian Paints were among the laggards.
However, the broader Indian markets were not impacted as communication lines at BSE remained operational .” Technical glitch did not impact domestic market sentiment though volatility was high with a positive prejudice, in the first session. During the extra session, the market gathered more strength and hugely outperforming the global peers, triggered by squaring-off F&O positions a day ahead of the prefixed monthly expiry date.”The global market was mixed, not very convinced that world central banks like Fed will maintain a flexible monetary policy even during rising bond yield and inflation. And the Asian market was negatively impacted by a hike in stamp duty on equities,” said Vinod Nair, Head of Research at Geojit Financial Services.BSE bankex, finance, telecom, capital goods and energy indices rallied up to 3.86%, while power and utilities ended in the red.Broader BSE midcap and smallcap indices surged up to 1.08%.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended on a negative note.
Stock exchanges in Europe, however, were trading with gains in mid-session deals.