Mere days after a systems failure within the automated operations of one of the New York Stock Exchange's market-markers caused wild share price distortions, a major European bourse is having its own version of a technical meltdown.
The Spanish Bolsa de Madrid, a stock exchange based in the Spanish capital that also coordinates trading with three other Iberian exchanges, saw trading halted for nearly five hours Monday, from 10:05 a.m. Madrid time to just after 2:50 p.m. The disruption in market action came amidst an incipient stock rally that appeared to resume with trading.
Noting that "it is now fixed and the market is working," Jesús Merino, a spokesman for exchange operator Bolsas y Mercados Expañoles, said that "we know it was caused by technical problems" and described the situation as "an unusual happening."
Details were scarce as to the cause of the technical glitch, and even market participants were at a loss Monday to explain what was going on precisely.
"There's been technical problems in the bourse that have forced a stop to trading," Tito López, an equities trading specialist for broker-dealer M&H AVB, said, adding "we haven't been told why."
Several market participants interviewed took a somewhat blasé attitude to the situation, seemingly more interested in the market upswing that followed the resumption in trading. Indeed, following a prolonged period of internal auction to allow the exchange an "open that reflects a more adjusted price chain" dynamic, as López explained, the benchmark index of Spanish stocks was up nearly 4 percent.
The breakdown in trading, nonetheless, comes at an inopportune time for Spanish financiers, many of who are on vacation -- August is traditionally a very slow month in Europe -- but also know they are just a phone call away from being back at the office to deal with the fallout of big political decisions in coming days or weeks. Among other things, the latest parlor game among European leaders and pundits is guessing when Spanish Prime Minister Mariano Rajoy, who is reluctant to do so, will be forced to ask for a sovereign bailout of his country.
The Spanish Comisión Nacional del Mercado de Valores said it could not comment on whether it was investigating the market glitch Monday but that such an event "does fall within its competency."