With a technical glitch, country’s largest bourse National Stock Exchange (NSE) on Monday was suspended for over three hours, leaving investors with no real time updates. The bourse’s both cash and derivative segments were hit badly. Though the exchange gave regular updates on when trading would start, rumour mills were working overtime on the cause of the delay.
However, shrugging off the unexpected snag with the NSE, stock markets rallied at BSE with Sensex surging by over 355 points and the investor’s wealth touching the $2-trillion mark on Monday.
The real reason for the sudden halt was not clear but the exchange attributed it to technical glitches and the Finance Ministry also sought a report from market regulator SEBI on the issue. The IPO-bound exchange ‘deeply apologised’ for the glitch even as trading went off smoothly at rival BSE where volumes surged. Sources at the Finance Ministry said it was a technical problem that led to trading disruptions and there was no information about hacking.
Investors faced problems since morning in executing trade and the exchange stopped trading in cash as well as Futures and Options (F&O) segment. After at least two attempts to set things right, the NSE resumed operations at 1230 hours but display issue persisted which was addressed later.
Despite the technical snag with the NSE, stock markets on the Dalal Street rallied as BSE benchmark Sensex touched a record high of 31,768.39 points, surging by over 355 points during the trading session. The markets cheered as investor wealth touched the $2-trillion mark on Monday. At the close of trade, the market capitalisation or M-Cap of all the BSE listed companies stood at Rs 1,29,60,905 crore ($2 trillion). There are over 5,200 companies listed on BSE, of which over 2,800 are traded actively.
As far as such technical issues are concerned, there have been instances earlier also when the NSE and the BSE have faced trading problems. In a statement issued at around 3. 30 PM, the exchange said cash market segment did not function normally due to technical problem at the opening on Monday and was closed.
“F&O and Currency Derivatives Segment or CDS market segments opened normally. Subsequently after giving notice to the market, the F&O segment was also closed,” it said. Despite the chaos, the benchmark 50-share Nifty settled above the 9,700-mark for the first time.
Since morning, investors had faced problems in executing trade and later the exchange stopped trading in cash as well as Futures & Options (F&O) segments. NSE’s chief of business development Ravi Varanasi said that normal market operations resumed at 1230 hours and since then the system has been functioning fine. “We are carrying out an internal review of the technical glitch,” he said.
The technical glitch in its trading system also comes at a time when the NSE is awaiting approval from the markets regulator Sebi for its Rs 10,000 crore IPO. Besides, the watchdog is looking into the issue that the bourse had allegedly provided preferential access to some brokers.
Following the technical glitch, Sebi, in the afternoon, said it was closely monitoring the situation while the Finance Ministry has sought a report on the matter. “NSE deeply apologises for the glitch. The matter 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,” it said in the statement.
Besides, the matter has been referred to the Standing Committee on Technology to review the problem and approve measures to prevent recurrence of such glitches. Sources at the Finance Ministry said this sort of problem faced by the NSE is a serious concern and hoped that such situations do not happen again. “let’s wait for the report. The NSE will send a detailed report to Sebi. The report will be sent to us through Sebi. We expect an interim report from Sebi by the end of the day,” the source said.
The NSE has been the largest stock exchange in India in terms of total and average daily turnover for shares every year since 1995, as per Sebi data.
Epic Research CEO Mustafa Nadeem said the problem actually got worse when there was no clear statement or guidance from the NSE about the glitch and the clarification came late at around 1000 hours.