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HindustanTimes Sat,12 Jul 2014

NSE crashes 16% after faulty trading

HT Correspondent, Hindustantimes.com  New Delhi, October 05, 2012
First Published: 12:19 IST(5/10/2012) | Last Updated: 01:38 IST(6/10/2012)

National Stock exchange (NSE) on Friday morning saw a 15-minute halt in trading in cash market after Emkay Global Financial Services placed erroneous orders worth Rs. 650 crore causing a sharp fall on the Nifty. The confusion led to a drastic fall of 15.5% fall over Thursday’s close on 50-share Nifty index after which the trading had to be halted for some time.

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“The market opened normally today and Nifty opened at 5,815. At 9.50 am, the Nifty circuit filter got triggered, upon which the cash market was closed automatically. The Nifty fall was apparently on account of the entry of 59 erroneous orders, which resulted in multiple trades for an aggregate value of over R650 crore,” the NSE said in a statement.

It said Emkay entered the orders on behalf of an institutional client and quantity entered was erroneous.

The NSE said a single terminal at Emkay placed 59 erroneous orders worth R650 crore. The trades triggered a sudden drop of more than 900 points or 15.5% fall over Thursday’s close on Nifty to a session low of 4,888.2 points. The circuit filter was triggered at 10% and the cash market was stopped.

Ravi Varanasi, head, business development, NSE said, “Emkay was asked to close out its positions arising out of erroneous trades, which they have done. The exchange then disabled the member from trading and there is no question of any glitch or malfunctioning in systems.”

The company said the orders that were already in the system were executed in the next few seconds and the market was reopened within a few minutes since the price movement was on account of erroneous trades.

It is still not clear what would happen to the trades placed by investors other than Emkay at the time of the trading halt. Shares of Emkay were down by 9.85% or R3.4 to close at R31.1 on Friday.

Emkay did not comment on the issue.


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