Financial Technologies, MCX slump as National Spot Exchange suspends trading

Shares of Financial Technologies India Ltd (FTIL) and MCX slumped after the National Spot Exchange Ltd, a commodities exchange in which FTIL has substantial stake, suspended trading in one-day forward contracts.

FTIL is also is the promoter of the Multi Commodity Exchange (MCX).

Investors dumped the stocks as the abrupt suspension of trading on the contract created confusion among them.

On the Bombay Stock Exchange (BSE), both the stocks were locked in the lower circuit after shedding 19.99 per cent each.

Financial Technologies, which had promoted NSEL jointly with National Agricultural Cooperative Marketing Federation of India Ltd (Nafed), ended the session down 64.59 per cent at Rs191.75 on the BSE and the MCX stock was down 19.99 per cent at Rs512.05.

NSEL said it stopped trading in the one-day spot contract after the Department of Consumer Affairs, on July 12, asked it not to launch new contracts that could create uncertainty among traders.

NSEL said, it had since given an undertaking to the government and simultaneously introduced T+10 with trade to trade settlement, to ensure ''orderly participation without creating any negative sentiments in the market''.

"This abrupt action has created uncertainty and doubt about continuity of trading on the exchange and hence most of the participants started withdrawing from the market," NSEL said in a statement.

The exchange has deferred delivery and settlement of all pending contracts for a period of 15 days.

However, NSEL said trading and settlement in its "e-series" contracts, that enables investors to buy and sell commodities in demat form, would continue.

The spot exchange clocked an annual turnover of Rs600 crore in the 2012-13 financial year, and had 67 running contracts, mostly in sugar and rice.

Both FTIL and MCX said there would be no adverse impact on their businesses after NSEL, a group company, decided to temporarily halt trading on one-day forward contracts.