Terror attacks in 1993 and 2008: Two instances when the BSE, NSE were shut

Authorities, for now, have decided against shutting stock exchanges and financial markets on Monday in the wake of coronavirus (Covid-19) pandemic. In a notification, the National Stock Exchange (NSE) and BSE, said it would be business as usual and all market segments will operate normally.

Well, here is a piece of history. The two instances the markets were shut by authorities was back in 1993 and in 2008 in the wake of terror attacks in Mumbai. The 1993 terror attack was a series of 12 bomb explosions that rocked Mumbai (then known as Bombay), on 12 March. The single-day attacks resulted in 317 fatalities and 1,400 injuries, according to reports. Among the targeted locations was the BSE building in Fort.

More recently in 2008, a series of coordinated attacks in Mumbai shook the city between November 26 till November 28. The stock exchanges, as a result was closed for trading on November 27 in response to the development.

While acknowledging that the health and safety is of paramount importance, analysts say shutting the exchange now for a prolonged duration in the backdrop of COVID-19 can send a wrong signal to foreign investors.

“Foreign investors have a huge investment in the Indian financial markets and shutting the exchange for long will send out a wrong signal. That said, the authorities have taken appropriate steps to ensure safety of employees and also taken adequate measures that the investors / traders and the other stakeholders do not panic,” says G Chokkalingam, founder and managing director at Equinomics Research.

Foreign investors as it is have been on a selling spree thus far in March given the COVID-19-related developments. According to the available data, foreign institutional investors (FIIs) have sold a net $4.9 billion of Indian equities thus far in the current month. Eight of the top-10 Indian companies saw a combined loss of Rs 3.63 trillion in market valuation last week, with HDFC Bank taking the biggest hit.

Meanwhile, market regulator Securities and Exchange Board of India (Sebi) on Friday halved position limits for certain stock futures, restricted short-selling of index derivatives and raised margin rates for some shares in a bid to curb volatility. That apart, market-wide position limit (MWPL) has also been halved for highly volatile stocks — those that see an average daily variation of 15 per cent during the week.