A punching error on India’s most valued company, Reliance Industries Ltd (RIL), at the Bombay Stock Exchange (BSE) created a fright on Tuesday, as the BSE Sensex fell by over 400 points in a second to an intra-day loss of 626 points before recovering to close the day at 16,572, down 372 points.
While the punching error rattled the markets, stocks were also knocked by a tumble in European shares following a 15 per cent fall in oil major British Petroleum’s (BP’s) share following serious concerns about its future due to an out-of-control oil spill in the Gulf of Mexico.
“There was a punching error at the exchange where RIL got punched instead of ICICI Bank, leading to a sharp blip for a few seconds,” said a market source on condition of anonymity.
As a result RIL that has a weightage of 14.1 per cent in the Sensex fell sharply to lose Rs 204, or 20 per cent, for a few seconds to touch an intra-day low of Rs 840.50 before it recovered to close at Rs 1,011.50.
In contrast, the lowest traded price for RIL at the National Stock Exchange (NSE) was Rs 1,004. But the Nifty was hit overall, and closed below the 5,000 mark.
“It was instantaneous and any loss incurred on these accounts gets reversed, so I don’t think anyone would incur any loss,” said a trader, who did not wish to be named.
A BSE official said the exchange was investigating the error and will issue a statement after the probe got over. RIL declined to comment on the issue, saying it was “market related”.
Capital markets regulator Securities and Exchange Board of India did not comment.
The punching error scare in Mumbai followed a similar fright in New York, when a similar error on May 6, saw Dow Jones Industrial Average crash by 1,081 points, or 10 per cent, for few seconds.
The Nifty fell by 2.3 per cent during the day to close at 4,970 as the markets worldwide fell on account of pressures in Europe and its currency.
“The markets fell in line with other Asian and European markets as concerns grew over Europe and growth in China,” said Alex Mathew, head of research at Geojit BNP Paribas Financial Services.