The Bombay Stock Exchange (BSE) had to shut down for about three hours on Thursday due to a technical glitch in its computer network, leading to a fall in the day’s turnover to Rs. 14,824.79 crore against the usual figure of between Rs. 30,000 crore and Rs. 50,000 crore. A panel has been appointed to probe the cause of this outage.
The BSE Sensex, which opened strongly at 9.15am and surged 83 points to another record high of 25,924.25 before the shutdown, ended the day at 25,823.75, down 0.1%. The Nifty closed down 0.1% at 7,714.80. Trading continued uninterrupted on the rival National Stock Exchange.
“BSE faced network-related issues today. Several users were logged out abruptly due to problems in some components of the BSE computer network,” the BSE said in a statement.
“Every day, more than 8,000 connections (brokerage houses and BSE members) log in. At 9.42am today (Thursday), the number of connections fell to less than 2,000, and hence, the market needed to be closed as per current regulations.”
The rules stipulate that the exchange has to shut down when the number of connections falls to less than 40% (approximately 3,500).
“All trades that took place before the market was halted at 9.42am will be honoured. All unexecuted orders will be cancelled,” said Ashish Kumar Chauhan, CEO of BSE. Thus, investors who had open positions when the outage took place will not lose any money. But some operators hedged their bets by taking positions in the illegal “dabba” market.
This is the fourth time Asia’s oldest exchange has faced technology-related problems this year, but Thursday’s outage was by far the most serious.
On April 7, April 9 and June 11, the exchange faced network-related glitches that led to stock prices not updating for a few minutes on each occasion.
“BSE has set up a committee comprising exchange officials and its technology providers, HCL Comnet and Cisco, to probe the cause of this technical problem,” Chauhan said.
The report will be presented to BSE’s technology advisory committee consisting of IT heads of various companies, market experts and academics. It will also be sent to stock market regulator, the Securities and Exchange Board of India and the finance ministry, which has sought a report on the matter.