UPDATE 5-Euronext plagued by two glitches Monday, latest exchange to go down

(Adds closing glitch, link to alert, impacted companies, analyst quote)

By Thyagaraju Adinarayan and John McCrank

LONDON/NEW YORK, Oct 19 (Reuters) - Exchange operator Euronext experienced two technical glitches on Monday, one which froze morning transactions in Amsterdam, Brussels, Lisbon and Paris and another at the close, when much of the key trading activity happens.

The glitches were the latest in a string of breakdowns this year on international exchanges, including a hardware failure at the Tokyo Stock Exchange earlier this month, cyberattacks that hit New Zealand's stock exchange, and a software glitch at Germany's electronic trading platform Xetra, managed by Deutsche Boerse.

The first problem happened early in the day, when Euronext said around 1000 CET (0800 GMT) that trading in all its products had been halted. Two hours later, it issued a statement saying the cause had been identified and resolved.

But after the end of trading, the exchange issued an alert https://prod.euronext.com/en/market-status/view/15235 saying that its cash market closure had not occurred as expected as auctions "did not take place for many instruments".

"Instead of this, trading was maintained in continuous mode for reasons that are being investigated," it said. It had decided to cancel all the trades that occurred after 1730 on all assets apart from commodities.

The end of the trading day has become the busiest time of day, with a growing portion of daily equity volumes concentrated into the five minute closing auctions.

“If the close in any market doesn’t function properly, it’s a problem,” said Spencer Mindlin, an analyst focused on capital markets technology at Aite Group.

“Every year we’ve seen the market close gaining increased importance because of the rise of index investing and congruently ETFs, and all those mutual funds and all of those ETFs are dependent on a proper functioning process at the end of the day for benchmarking.”

BACK TO NORMAL

Euronext said trading should be back to normal on Tuesday morning.

"All order books on all asset classes will be purged prior to the call phase tomorrow morning, in order to secure smooth opening," the exchange said on its Twitter feed.

Companies affected by the glitches issued alerts. Coffee and tea group JDE Peet's and Royal Philips both said in statements that they had been informed by Euronext that they would not be provided with accurate closing prices.

"It is a huge embarrassment to Euronext," said James Angel, a finance professor at Georgetown University who specializes in market structure. But he added it was surprising that there were not more such glitches "because our trading networks are very complex IT systems."

The last major outage on a U.S. exchange was in 2018, when Intercontinental Exchange Inc's New York Stock Exchange (NYSE) suspended trading in five stocks, including Amazon and Alphabet, for part of the day due to a technical problem.

One of the most bizarre reasons for an outage was in 1994, when a squirrel chewed through a power line in Trumbull, Connecticut, where the Nasdaq used to keep its servers, setting off a sequence of events that shut down trading on the Nasdaq for nearly an hour and a half. (Reporting by Thyagaraju Adinarayan, Julien Ponthus, Danilo Masoni and John McCrank; writing by Megan Davies; Editing by Mark Potter and Sonya Hepinstall)

© Copyright Thomson Reuters 2020. Click For Restrictions - http://about.reuters.com/fulllegal.asp

Read more about

Tip of the Day

Move welding essentials easily

vise-grinder caddy By welding receivers to a large section of steel pipe and adding wheels, I have saved many trips to the workbench. Now I slide my most... read more

Talk in Marketing

Most Recent Poll

Have you been attending webinars and virtual events to learn from ag product and service providers?