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What brought down a $6 trillion stock market

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On October 1, a piece of hardware called the No. 1 shared disk device malfunctioned, forcing it to shut down trading for an entire day, first since it began all-electronic trading in 1999.

What brought down a $6 trillion stock market
Last week’s fiasco at the Tokyo Stock Exchange (TSE) has made people take notice of the vulnerability of hundreds of pieces of hardware parts that are the backbone of stock markets.
On October 1, a piece of hardware called the No. 1 shared disk device malfunctioned, in the world's third-largest stock market forcing it to shut down trading for an entire day, first since it began all-electronic trading in 1999.
"I feel painfully responsible for all the confusion this incident has caused for investors and market participants," TSE chief executive officer Koichiro Miyahara told a news briefing. The TSE was prone to technical troubles in the past and was notorious for sluggish trading, although there have been fewer glitches since a new system was adopted in 2010.
Tokyo Governor Yuriko Koike said a quick fix was crucial to ensure trust in the roughly $6 trillion market which ranks behind New York and Shanghai, data from the World Federation of Exchanges shows.
The development also hit many traders and investors who were looking to buy back shares after the first US presidential debate. Many market participants had hoped to buy back stocks or increase holdings after an overnight rise on Wall Street, but were unable to do so, traders and analysts told Reuters.
While TSE said the outage was the result of a hardware problem at its "Arrowhead" trading system, and a subsequent failure to switch over to a backup device, it has raised questions about the exchange's credibility at a time when Japan’s leadership makes digitalisation a top priority.
Further, the crisis could also dent Tokyo's hopes of attracting more banks and fund managers from Hong Kong amid concerns over a new security law imposed by China.
(With agency inputs)