NSE Debacle and Market Rebound Saga

The two exchanges – NSE and BSE cohabitate to maintain synergy in the Indian stock market. One doesn’t come across either of them going down or not functioning quite often. However, something unprecedented happened on February 24, 2021. 

The National Stock Exchange (NSE) faced unexpected technical issues. What started as a discontinuation of the NSE Index’s live data feed, snowballed into a complete halt on trading on the NSE. 

Here’s what happened. 

Groww and other entities stopped receiving  NSE indices’ live data feed after 10:07 AM. Post 11:40 AM , trading was also halted on NSE.

As this had far reaching implications especially on traders, we (Groww team) communicated the following message ; Trading is halted on NSE. Please try placing an order on BSE’ to all the users attempting an NSE order. 

While we saw a surge in orders on BSE, a lot of users took a step back to wait and watch. However, our investors who had placed their orders on NSE already, had several doubts regarding the fate of their open orders and whether they would be able to square-off their open intraday positions on NSE. 

We kept communicating with our investors constantly via our updates channel (groww.in/p/updates ) about any new developments around open positions and auto-square offs. 

We informed them that all their open intraday positions would be squared off by the system. The system tried squaring off positions for all users on BSE after 2:00 PM. Additionally, as told, no square-off penalty (Rs.50/position) was levied for the day.

Once we received a confirmation from the exchange that all open orders would be cancelled, the same information was passed on to our user base on time to assuage their concerns. But, with no information on what trade might have been executed right around 11:40 AM we weren’t able to update the information on the user dashboard during market hours. 

The news by the exchanges that the market would re-open at 3:45 PM was on an extremely short notice. However, the tech team at Groww sprung to action to offer our investors a regular trading experience although Intraday trading was blocked on Groww given the uncertainties. 

The market response was exemplary. Bullish users drove up the market day change by more than 1.8%. 

As a result of this disruption, the market hours were extended beyond the regular hours, to put things back on track. The day ended for users at 5:00 PM – restoring normalcy and another day to look up to. 

My only takeaway from the fiasco is that such events are extremely rare in occurrence. While they did cause disruption and inconvenience, I feel we can never predict and prepare in advance for such black swan incidents. I truly believe that our investor community and the markets are very resilient and know how to take such setbacks in their stride.