MUMBAI (Reuters) – India’s National Stock Exchange on Friday defended its reopening the market after an unexpected shutdown this week, amid criticism about how it handled the situation.
Brokers had criticised the NSE over the lack of information after the four-hour shutdown on Wednesday. They said they were forced to close intra-day equity positions on another exchange, causing sharp losses to some investors.
India’s largest stock exchange, NSE announced on Wednesday it shut at 11:40 a.m. local time because of a telecoms problem. It announced market re-opening at about 3:17 p.m., by which time many brokers had closed their investors’ open positions.
“This communication was done only after there was visibility and clarity on resumption of services and any prior communication would not have been appropriate,” the NSE said in a statement on Friday.
In a social media firestorm, traders lashed out at the largest broker, Zerodha, dubbed the Robinhood platform of India, by posting snapshots of trading had communicated the re-opening and extension of trading.
“We sincerely regret the occurrence of the incident,” the NSE said in its Friday statement.
The exchange also said it decided to continue with its primary systems and not activate its disaster recovery site on Wednesday after evaluating all options to resume trading “at the earliest with least disruption to market participants.”
It added the processes it followed were in line with international best practices. India’s market regulator has asked the NSE to submit a detailed root cause analysis.
(Reporting by Abhirup Roy in Mumbai and Aditya Kalra in New Delhi; editing by David Goodman, Larry King)