28th July 2005, 10:24 AM
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Stock Markets to be Closed Today!
Quote:
With Mumbai submerged after heavy torrential rains, regulators have decided to keep stock market trading, which is done nation-wide, closed tomorrow.
Bad weather disrupts cricket matches, but closing down stock market trading, which reflects the pulse of the economy, is an unprecedented phenomenon, according to some analysts.
Some market participants say that the near collapse of the system underscores the need to pay serious attention to Mumbai’s infrastructure. They argue that the country’s financial system is rooted in Mumbai.
The city needs much more than mere words from the Centre as it contributes nearly 40% of the country’s tax revenue.
Officials at stock exchanges say that intense pressure on the back office staff at banks and brokerage houses has made it nearly impossible for the trading system to function.
The stock exchanges have a T+2 trading system. This means that a transaction that is executed today is settled two days later. In simple terms, on the settlement day buyers get the shares and sellers get their money.
A public holiday declared in Maharashtra due to some hostile weather conditions on Wednesday and Thursday has resulted in creating a settlement backlog.
“As advised by the Sebi, in view of the unscheduled consecutive banking holiday and consequent difficulties in moving funds across banks for accumulated settlements, it has been decided to keep the NSE and the BSE closed on Thursday, July 28, 2005,” a release issued by NSE said.
The derivative contract expiry scheduled for tomorrow will now be on Friday. Mumbai accounts for nearly 45% of the average daily turnover of nearly Rs 10,000 crore or 900 million shares.
On Wednesday, BSE witnessed trading in only 191 million shares against over 400 million shares traded every day. On the NSE, the trading volume fell to 253 million shares against an average 500 million shares traded daily in July 2005.
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Source: http://economictimes.***************/articleshow/1184233.cms
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