​ASX blames hardware failure for potential AU$3.5b trading blunder

The Australian Securities Exchange has said a hardware failure in the main database used by the system was behind Monday's series of trading glitches.

After a series of technical issues and errors disrupted and ultimately halted trading on the Australian Securities Exchange (ASX), managing director and CEO Dominic Stevens has apologised in a statement, pointing to a hardware failure as the cause on Monday's troubles.

"Today, ASX encountered issues with our equities trading system, ASX Trade. What happened today does not meet the high standards of operations and system reliability that we set ourselves, and that our customers should rightly expect of us. We apologise for the disruption," Stevens said.

"The primary issue arose from a hardware failure in the main database used by the system. This had a number of knock-on consequences that affected the operation of the market. These included a delay to the market open and the decision to close the market early due to ongoing issues that impacted the proper functioning of the trading platform."

Stevens highlighted that the issues the exchange suffered were "not in any way related to cybersecurity".

As a result of the technical issues, the Australian share market may have foregone up to AU$3.5 billion in turnover.

The ASX initially delayed opening, saying there was a technical issue with a function that allows it to manage individual shares on its Nasdaq OMX equity trading platform.

The exchange closed 23 minutes early on Monday, after trading lasted less than an hour.

The closure followed a late start to trading that morning, with investors not able to buy and sell any stocks until after 11:30am AEST.

The ASX advised that there would be a delay with the opening of the ASX equities market at 10:07am AEST Monday morning, with a Twitter post saying updates would be provided as they became available.

The exchange then said the market was open for all securities except for those in the range of N-R, the timetable for which then flagged at entering pre-open at 1:00pm AEST for a 1:20pm AEST open.

The market was only fully opened for trading at 1:20pm AEST, before the ASX put trading into a halt again at 2:13pm AEST.

CommSec market analyst Steven Daghlian said due to the delays and uncertainty about only AU$1.2 billion worth of shares were traded during the day, which was 20 percent of the share value traded the previous Monday.

"It's been interrupted trade throughout the day so that's kept the value and volume very light today," he said.

"From the ASX200 as an index, it's just below 5,300 points still. So it's been pretty quiet overall. If we look at the actual percentage moves so far we're pretty flat and the market is still pretty close to its worst levels in 10 weeks.

"This is week six now that the market is in the red."

ASX was unable to comment on the cost of the delays or the loss in overall turnover, but said average daily turnover this year had been about AU$4.6 billion.

CMC Markets chief market analyst Ric Spooner doubted traders would have lost that much because there was no market moving news on Monday morning.

"There are two drivers of how business might be lost, one is how long the market was closed for and secondly is what news has happened during the period it has been closed," he told AAP. "I'd say not a great deal has happened this morning, but we'll never know."

Competitor exchange Chi-X also delayed its opening until 11:30am AEST, but was able to conduct normal trade for the rest of the day.

Federal Treasurer Scott Morrison said dealing with technical issues was a normal thing for companies in any advanced economy.

"It is one of the issues of dealing in a 21st century economy. We are more reliant on these systems than we ever have been," he told reporters.

With AAP

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