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ASX tech meltdown shuts markets on eight-month high

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The ASX has accepted the blame for a technology meltdown that caused massive disruptions to Australian sharemarkets.

A technology meltdown has resulted in massive disruptions for the Australian stock market, with a more than six-hour outage causing major headaches for investors.

At 10.24am on Monday, the Australian Stock Exchange (ASX) initiated a market-wide trading halt following an IT malfunction that prevented billions of dollars of turnover.

The ASX and its technology provider Nasdaq confirmed a software issue relating to the implementation of a new equity trading system caused the meltdown and inaccurate market data for several traded securities.

“The issue will be resolved overnight with the market reopening at 10am tomorrow,” the ASX said in a statement at 4.03pm (AEDT).

ASX and Nasdaq had conducted a year’s worth of testing before launching the “go live” for its refreshed trading platform.

“The outage falls short of the high standards we set ourselves and the standards others expect of us,” ASX chief executive Dominic Stevens said.

“ASX is very disappointed with today’s outage and sorry for the disruption caused to investors, customers and other market users.”

Equity markets were closed for the remainder of Monday, with the halt also stopping trading for exchange traded funds (ETF) and government bonds.

It is the longest outage since 2016 and the fifth major pause in trading in the past 15 years.

The ASX has accepted responsibility for the outage, with Mr Stevens saying: “The obligation to get this right and provide a reliable and resilient trading system for the market rests with us.”

Social media users were quick to speculate the ASX had been hit by a cyber attack; however, the claims were unsubstantiated.

Prior to the shutdown, local stocks were trading at eight-month highs following strong gains made on Wall Street on Friday that lifted the S&P 500 1.4 per cent to a high 3585 points.

Global markets have recently surged following positive information about a potential coronavirus vaccine being close to completion.

“Optimism over vaccine developments has largely been priced in for now, while the future growth outlook has brightened particularly for the second half of 2021,” ANZ economists said.

“Attention is again focusing on the ugly near-term implications of the northern hemisphere’s COVID-19 surge, very low inflation prints everywhere and the scope for additional pandemic fiscal and monetary stimulus.”

The benchmark S&P/ ASX 200 index to 10.24am was trading up 79 points, or 1.2 per cent, to 6484.3, while the broader All Ordinaries index rose 77.7 points, or 1.2 per cent, to 6687.

At 3.43pm (AEDT), the Australian dollar was trading 0.3 per cent higher at 72.88 US cents.

Unibail-Rodamco-Westfield had experienced the biggest surge before the halt, rising 9.3 per cent to $4 per share, while Sky City Entertainment shares slumped 4.1 per cent to $2.84 each.

Major miners were trading in positive territory, with Rio Tinto shares up 1.8 per cent to $97.8 and BHP up 2.1 per cent to $36.53 per share.

Commonwealth Bank gained 1.9 per cent to $74.5 per share, while Westpac rose 1.3 per cent to $18.57 per share.

ANZ jumped 2.6 per cent to $21.12 per share, and NAB shares lifted 2 per cent to $21.62 each.

Stock in Telstra rose 1.3 per cent to $3.17 per share, while Qantas’s share price increased 1.8 per cent to $5.18 each.

Wesfarmers shares were flat at $48.52, and Woolworths shares rose 1.1 per cent to $38.48 each

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