Mumbai Returns to Normal After Worst Power Failure in Decades
(Bloomberg) - Power has been restored to most parts of Indian financial capital after the worst blackout in decades disrupted the transportation network and briefly affected trading volumes in the bond markets.
A power outage occurred around 10 a.m. local time in Mumbai, home to India's largest stock exchanges, financial regulators and central bank. A power trip - or an overload of the circuit that forces the system to shut down automatically - was the cause, according to local utility Tata Power Ltd. the reason for the collapse of the network.
BSE Ltd. and National Stock Exchange of India Ltd. continued to function normally. However, trading volume in the bond market declined as many traders protecting themselves from the coronavirus pandemic at home were unable to complete the trade. Some rail connections were shut down, while airport operations and hospitals were not affected.
The city of 20 million people accounts for about 6% of the economy of $ 2.9 trillion. While Mumbai has been largely immune to the daily blackouts affecting large swaths of the nation, a long and widespread blackout in the capital of India's most industrialized state would make it difficult for Prime Minister Narendra Modi to revive a 24% shrinking economy as the quarter ended in June.
"In my 18 years in Mumbai, I haven't encountered such widespread disruption in the middle of the busiest time for the stock markets," said Chokkalingam G, chief investment officer, Equinomics Research & Advisory Ltd. in Mumbai, whose homeland had no electricity at 4 p.m. "Especially during a pandemic, it is not good for such an event to recur."
According to the local authorities, power was restored to key services such as trains and hospitals at around 2:00 p.m. The city has seen increasing coronavirus infections.
The country had suffered a major blackout in 2012 that affected 360 million people due to a grid failure, while a fault at a Tata Power plant in 2014 caused disruption in parts of Mumbai. Modi plans to invest around US $ 350 billion in energy infrastructure by March 2025. Most of this will go to building conventional and unconventional power plants, as well as transmission and distribution grids, to deliver on its promise to provide clean energy to everyone around the clock by 2025.
Mumbai has not seen such a major power outage as it did on Monday in decades. Banks and other important institutions in the Indian financial center therefore assume an uninterrupted supply or minimal interruptions and do not have a long emergency power supply.
"Most of our meetings and discussions have been online for the past six months and today have been delayed," said Sameer Kaul, CEO of TrustPlutus Wealth Management Pvt. Ltd. "Power outages in Mumbai, if any, are usually resolved fairly quickly."
Bond traders said trading volume decreased immediately after the default but recovered later. Government bonds increased their gains, with the 10-year bond yield falling four basis points to 5.90%, while the S&P BSE Sensex rose 0.2%.
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