MUMBAI, India (CU)_India’s National Stock Exchange was forced to halt trading on Wednesday (Feb 24) owing to a telecom disruption, which left investors stranded ahead of the crucial expiry of monthly derivative contracts.
Headquartered in the country’s financial capital of Mumbai, the NSE is the world’s third-largest stock exchange by the number of equity trades, and is also the largest derivatives bourse globally in terms of volume.
The NSE said in a statement that the trading in all segments closed at 1140 IST, and will be restored “as soon as issue is resolved”.
Sandip Sabharwal, a Mumbai-based fund manager claimed that global exchanges need to have adequate backups in order to ensure that even if there is an outage, it is restored fast. “Asian markets saw a significant crash on Wednesday, and at such times, price discovery real-time becomes even more important,” he noted.
The incident on Wednesday revived memories of an episode in July 2017, when the NSE shut both the cash and derivatives segments for five hours due to a similar systems glitch, prompting calls for review of the bourse’s contingency plans. Trading was later resumed after keeping traders on tenterhooks for about three hours, with conflicting messages about what time operations would resume.
The NSE Nifty 50 Index was last seen up 0.8% at 14,820.45. The halt in trading came ahead of the expiry of monthly derivative contracts due on Thursday, which typically leads to an increase in market volatility.
