Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

Euronext's markets resume trading after Monday's glitches

Published 10/20/2020, 03:15 AM
Updated 10/20/2020, 05:25 AM
© Reuters. FILE PHOTO: The logo of stock market operator Euronext is seen on a building in the financial district of la Defense in Courbevoie
DB1Gn
-
LSEG
-
NZXZ
-
ENX
-

By Sudip Kar-Gupta and Thyagaraju Adinarayan

PARIS/LONDON (Reuters) - The European cash, derivatives and commodity futures markets run by Euronext (PA:ENX) resumed normal trading on Tuesday, a day after two technical glitches caused widespread disruption to several of Western Europe's major stock exchanges.

A glitch on Monday morning caused problems across all of Euronext's markets, which span from Dublin and Amsterdam to Paris and Lisbon. Trade resumed normally in the afternoon but there were then major price swings during closing auctions, prompting the exchange to cancel all orders placed after 1730 Central European Time (CET).

It was the latest in a number of breakdowns on international exchanges this year ranging from Tokyo to Deutsche Boerse (DE:DB1Gn).

Euronext said the root cause of the issue was a technical failure impacting one of its data management systems, denying any possibility of there being a cyber attack.

While the problems looked to have been resolved in Tuesday morning trade, the outage will be embarrassing for Euronext which is planning a major expansion through a 4.3 billion euro ($5.07 billion) deal to buy Borsa Italiana from London Stock Exchange (L:LSE).

"(We) sat on the sidelines for most of the morning," said Mark Taylor, a sales trader at Mirabaud, adding it had to cancel a couple of orders due to a "mass confusion" on the close.

The problems at the close are likely to have been particularly problematic as exchange-traded funds (ETFs) and hedge funds typically use prices set during closing auctions for their daily pricing, making the final five minutes of trade crucial.

The glitches caused the share price of Dutch healthcare technology company Philips (AS:PHG) to fall almost 4% at Monday's close to less than 40 euros. The company later said it was informed by Euronext that their closing price would actually be set at 42.3 euros.

A Euronext spokesman declined to comment on the value of trade orders cancelled on Monday's close. Closing auctions across Europe's major bourses have on average accounted for a fifth of daily average volumes, analysts say.

© Reuters. FILE PHOTO: The logo of stock market operator Euronext is seen on a building in the financial district of la Defense in Courbevoie

($1 = 0.8485 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.