BSE resumes trading post tech glitch; traders, arbitragers hit most - Economic Times

NEW DELHI: The Bombay Stock Exchange resumed trading after a halt of over 3 hours on Thursday, which left intraday traders stranded as they could not go through.

BSE resumed trading after a fresh pre-open session and was trading 0.08 per cent higher at 25,862 at 01:00 p.m.

However, post reopening the S&P BSE Sensex came at a kissing distance from hitting its next crucial level of 26000. The index rose 157 points to hit its fresh 52-week high of 25,999.08.

This is the second time in two months, when BSE has faced a network glitch which is likely to hit day traders and arbitragers the most, say analysts. Although the National Stock Exchange (NSE) remained operational.

"BSE had to close down trading due to a network outage that left traders stranded as trades could not go through. Particularly hit were traders with arbitrage positions as they struggled to cover one leg of their trade as NSE continued to remain operational," said Kunal Saraogi, CEO at Equityrush.com.

"The fact that Nifty has been trading flat without too much of a change might give traders an opportunity to exit their trades on BSE once the exchange becomes operational again without too much of a damage," he added.

Saraogi is of the view that that outages like this cause panic among traders who scramble to cover their positions, which in turn makes the situation worse.

The shut-down of BSE markets is bad news for traders, who mostly undertake intraday trades on the exchange as lot of shares are listed on the BSE and not on the NSE.

"There are many stocks which are listed only on BSE. So small investors will have the biggest impact," said A K Prabhakar, Independent Market Expert. Most of the BSE-listed companies are held by retail or small investors, he said.

Mostly arbitragers and day traders will be impacted most as they switch their positions from NSE to BSE and vice versa, say analysts.

"There is no doubt that it is not good for the markets and usually such single exchange shut down is not good for arbitragers," said Yogesh Nagaonkar, VP - Institutional Equities, Bonanza Institutional Equities.

"There are some scripts which are only listed on BSE and investors would not be able to buy or sell these shares, which is not at all a good thing. This will lead to reduction in volume on the BSE exchange as investor confidence will subside significantly," he added.

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