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Trading hour extension: Market experts criticise NSE's communication

Updated : February 24, 2021 05:54 PM IST

A technical glitch halted trading at the National Stock Exchange (NSE) for nearly 4 hours. The exchange resumed operations at 3:30 pm for 90 minutes. The exchange has blamed connectivity issues.

Talking about NSE glitch, Hemang Jani of Motilal Oswal Financial Services, said, “Technical glitches are a normal part of any business or anything that you do. But what is important is that we have some sort of an update in terms of the timing or what exactly the participants can do at a particular point of time; that would definitely help."

"I believe that exchanges and regulators would have their own reasons as to why there has been some sort of a delay in giving an update because there are a lot of these intraday positions and square off related issues that brokerages would be facing."

Jani said if there is a timely update let, say at about 3 o’clock, then it would help them advise their clients properly and the settlement process can be smoothened rather than having to wait till the last moment and then guiding clients into what needs to be done.

"Each broker will be dealing with this situation in their own way. So, I think the update process should have been a little bit better. But I don’t think we should read too much into this. There are complex issues when you manage technology related things at an exchange level and I am sure they must be doing their best.”

“Before the technical glitch was there, the NSE volume was close to about Rs 30,000 crore and from 3:30 pm to 4:00 pm, in a span of 30 minutes we are seeing the NSE cash volume clocking about 1,04,000 crore. So in a matter of 30 minutes, I think almost about Rs 75,000 crore of volume has already been traded. This could be for various reasons, but that is the kind of pressure that is there on the system."

He said this would be one of the highest cash market volume baring the one that was seen on November 27 where the volume was 1,47,000 crore due to MSCI re-balancing. So, on a day like this the NSE cash volume is one of the highest in the recent past.

Rajesh Baheti, MD, Crosseas Capital Services, said, “What has happened throughout the day technological glitches do happen, we rely on technology, we rely on telecom these things do go down. What is the NSE policy now that has to be spelt out, that doesn’t take till 3:30 to figure this out."

"So if NSE had come back in the morning and said look there is a telecom problem we don’t know how long it will take to get fixed but whenever it will get fixed we are going to have at least an hour or hour and half trading of trading, if only that had been communicated I think the markets would have taken that in their stride and said okay we know that the markets are going to open, but they said nothing.”

“At 3:25pm you could see the tweets put out by Zerodha which is the largest brokerage in the country that they will wait till 3:00pm and then they will start squaring up everybody’s position in the BSE which is precisely what must have played out."

Big online brokerages didn’t have any communication from the exchange and then they went and simply offloaded everything at one go on the other exchange with little equity. So, I think there is a massive communication failure from the side of the NSE."

"They should have spelt out the policy that no matter what time the markets open, we will have them open for an hour-hour and a half even if it is beyond trading hours and decisions like this need not have waited till 3:30 pm. You don’t know when the line would start, but the fact that you want to start the exchange once the line starts should have been communicated well in advance.”

Also read: NSE glitch highlights: Trading hours extended till 5 pm; market experts criticize communication

Published : February 24, 2021 05:51 PM IST

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