Chaos reigns at NSE
- Longest outage on NSE
- NSE image takes a hit
- Sensex surges 1,030 pts
Mumbai: Sending stock market operations haywire in India, the National Stock Exchange (NSE) halted trading for nearly four hours due to 'issues' with telecom links of its two service providers. In its longest ever outage, the NSE had to shut its cash and derivatives segments. The disruption sent shock waves among the traders as they had to postpone all kinds of trading at the stock exchange.
About an hour into trading on Wednesday, traders in Mumbai flagged that levels for the cash segment on the NSE's benchmark Nifty 50 Index as well as the Nifty Bank Index stopped updating. After nearly 90 minutes of that disruption, at around 11:40 am., the exchange notified that it was shutting down all its market segments, including derivatives trading.
"NSE has multiple telecom links with two service providers to ensure smooth operations and we have received communication from both the telecom service providers that there are issues with their links due to which there is an impact on NSE system. In view of the above, all the segments have been closed at 11.40 am," an NSE spokesperson said. The trading disruption came ahead of Thursday's expiry of monthly derivatives contracts, which typically leads to an increase in market volatility.The NSE, the world's biggest derivatives exchange by number of contracts, handles about twice the stock volume of rival BSE Ltd. and controls about 80 per cent of India's derivatives market.
Wednesday's disruption revived memories of an episode in July 2017, when the NSE shut both the cash and derivatives segments due to technical issues, with traders unable to execute trades at its venue and prices not updating.
Trading was later restarted 3.45 pm after keeping traders on tenterhooks for about three hours with conflicting messages about what time operations would resume.
In a rare move, both NSE and BSE extended trading hours till 5 pm to enable an orderly closure of the markets. "It's a big relief for intraday and options traders," said Shrikant Chouhan, executive vice president for technical research at Kotak Securities. "Those who have long positions and short positions will try to reduce their exposure as early as possible, instead of waiting for Thursday."