The Sensex on Wednesday soared 1030.28 points on an unprecedented day that saw the trading hours extended till 5 pm after a technical glitch at the National Stock Exchange (NSE) froze activities on the country’s largest bourse for the greater part of the day.
The Securities and Exchange Board of India (Sebi) has asked the NSE to probe the halt and submit its report at the earliest.
The development left traders high and dry as they had to rush to square off their positions — on the eve of the monthly F&O (forward and options) expiry.
There have been such instances in the past as well: in June 2020, the exchange had suffered disruption.
At that time, its the prices in the bank option segment were not reflecting on the terminal linked to the exchange. Similarly, in September 2019, its system faced a trading outage as investors were unable to place orders in the final minutes of the trade.
Earlier in the day at around 10 am, dealers said that the tickers of indices such as the Nifty were not updating. The exchange halted trading at 11.40am. NSE blamed the glitch on the links of its telecom service providers.
“The NSE has multiple telecom links with two service providers ... 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. We are working on restoring the systems as soon as possible. In view of the above, all the segments have been closed at 11.40am and will be restored as soon as the issue is resolved,’’ it said in a statement in the morning.
What intrigued investors and the market regulator was that the NSE did not migrate to its disaster recovery site even after the glitch.
Sebi said that it has asked the bourse to explain the reasons for trading not migrating to the disaster recovery site. The market regulator added that while the “trading halt” continued till 3.30pm, given the exceptional situation arising out of this outage, it was decided to extend the trading hours from 3.30pm to 5pm.
Due to the glitch, some of the traders settled their positions on the BSE which resulted in its turnover rising.
Data from the bourse showed the turnover rising to Rs 40,698 crore compared with Rs 4,520.58 crore on Tuesday.
However, after trading resumed in the extended hours, there was a strong rally that saw the Sensex zooming 1030.28 points and the Nifty over 270 points on Wednesday, following strong buying in financial stocks. The NSE Nifty settled 274.20 points or 1.86 per cent higher at 14982. Similarly, the Sensex ended 1030.28 points or 2.07 per cent higher at 50781.69.
Axis Bank was the top gainer in the Sensex pack, rising around 5 per cent, followed by the HDFC twins, ICICI Bank, Bajaj Finance and SBI.
“The 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 outperformed the global peers, triggered by squaring-off F&O positions a day ahead of the pre-fixed monthly expiry date. The global market was mixed, not very convinced that world central banks like the FED will maintain a flexible monetary policy even during rising bond yield & inflation,” Vinod Nair Head of Research at Geojit Financial Services said.
