Five out of eight times when the National Stock Exchange faced sun outage in the last eight years, the equity markets have tanked.
Historical data also suggest that the markets dipped during each of the March sun outage period in the last four years.
The biggest fall in the markets during the sun outage was during March 8-16, 2000. During this period, the Nifty fell from 1666.25 to 1562.20, down 104.05 points. The BSE Sensex, during the period, tumbled from 5511.42 to 5102.41, a loss of 409.01 points.
A sun outage is a signal degradation phenomenon that affects the transmission of radio signals in satellite communications.
During a sun outage, which is normally a period of around 10-12 trading days, a bourse halts trading in the afternoon session for around 45 minutes.
Sun outage affects only the NSE as it relies on the V-SAT technology for data transfer. BSE uses leased lines for data transfer.
When trading on the NSE halts on each day of the sun outage period, the trading on the BSE continues. However, both the bourses extend the trading sessions till 4.15 pm during the period.
Sun outage occurs normally twice during a year, between March 4 and March 18, and between September 25 and October 9.
Interestingly, in the last four years the markets have risen only on three occasions and eased down five times during the sun outage. More interestingly, the sun outages in March have pulled down markets more significantly.
Arun Kejriwal, director, KRIS, said: "Its history that markets normally tend to remain weak in extended trading hours. . . but there's no logic for this."
The second biggest fall has been between March 5, and March 20, 2001. The Nifty fell from 1258.13 to 1119.06, a sharp fall of 139.07 points, while the Sensex tumbled 325.72 points from 3998.12 to 3672.40.
The biggest rise in the markets during a sun outage was between September 24, and October 9, 2003.
During this period, the Nifty rose from 1357.80 to 1502.10, a rise of 144.30 points. The Sensex, during the period, moved up from 4297.50 to 4698.68, a surge of 401.18 points.
In the latest sun outage, which started on March 4, 2004, the Nifty has risen from 1843.85 to 1,859.80 on March 9. Also, the Sensex moved up from 5842.20 to close at 5,839.25 on Tuesday.
In the sun outage between March 4-17, 2003, the Nifty fell from 1046.60 to 993.00, a loss of 53.60 points. During the period, the Sensex shed 159.09 points, from 3244.10 to 3084.91.
A similar pattern was witnessed in 2002. During the sun outage between March 4-20, 2002, the Nifty fell from 1177.35 to 1155.60 on March 20, a fall of 21.75 points. The Sensex tumbled from 3642.58 to 3581.32, down 61.28 points.
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