Having stopped at 11:45 AM, the NSE resumed operations at 3:30 PM, the normal daily closing time, and stayed open until 5:30, allowing traders to square off their intra-day positions. Brokers, including some large online firms such as Zerodha, had forcibly liquidated positions bought on margins. The brokerage faced the ire of several retail traders, who complained of losses on bets that were forcibly squared off.
Zerodha said it had no choice because it learnt too late about the NSE reopening.
“If NSE had informed brokers of a potential reopening or extension of trading hours, at least by 3 PM, we, along with many other brokers would not have had to take risk-mitigation measures and square off positions on BSE,” Zerodha said in a blog on Wednesday evening.
“Unfortunately, because there were no updates given to brokers, we had no other choice. The last-minute notification of the trading extension at 3:17 PM came a little too late.”
The government and the capital market regulator will look into the matter.
“We have asked them to apprise us (on the glitch),” a top finance ministry official said.
The Securities and Exchange Board of India (Sebi) has asked NSE to carry out a “detailed root cause analysis” of the stoppage and explain why trading didn’t migrate to the disaster recovery site.
The trouble began at about 10 AM when prices on the Nifty and other indices stopped updating due to connectivity issues. The stock exchange has leased lines from two telecom providers.
“NSE has multiple telecom links with two service providers to ensure redundancy 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,” NSE said in a statement.
The bourse’s team was unable to resolve the issue, forcing the exchange to shut the market at 11:45 AM. Throughout the afternoon, it was uncertain whether the market would reopen on Wednesday.
The BSE functioned normally but market participants said they could not execute bigger orders because of the lower liquidity, which increases the cost of trading. Most derivative trades in India take place on the NSE, while institutions mostly prefer it because of higher liquidity.
The decision to restart trading at 3:30 PM came as a surprise to many — brokers said they were not kept in the loop.
