Nifty dips 15% in freak trade, Emkay order causes 15-min disruption

59 erroneous orders result in multiple trades

National Stock Exchange (NSE) witnessed a freak trade in morning deals today. As a result, the Nifty dipped to an intra-day low of 4,888 at 9:50am, down 15 per cent from the opening level of 5,815. Trading resumed 15 minutes later at 10:05am.

Stocks like Sesa Goa, State Bank of India, Axis Bank, Cipla, HCL Technologies, Bharti Airtel, Hindustan Unilever and Tata Motors quoted 6 – 17 per cent lower at the NSE. Trade at the Bombay Stock Exchange, however, was error free.

“The market opened normally today and Nifty opened at 5,815. At 9.50.58 Nifty circuit filter got triggered upon which the cash market was closed automatically. The Nifty fall was apparently on account of abnormal orders resulting in multiple trades at low prices. While the Exchange systems functioned normally without any glitch, the above abnormal trades caused market closure automatically due to the index circuit filter getting triggered. The market was reopened by the Exchange with a pre-open phase at 10.00.22 and trading resumed at 10.05.00,” NSE said in a release.

The reason

According to the exchange, the market circuit filter got triggered due to entry of 59 erroneous orders which resulted in multiple trades for an aggregate value of over Rs 650 crore.

“These orders have been entered by a trading member Emkay Global Financial Services on behalf of an institutional client. These non-algo market orders have been entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book thereby causing the circuit filter to be triggered.  These orders have been identified to a specific dealer terminal,” the NSE release added.

Such instances are not new. Earlier on 01 June, 2010, Reliance Industries witnessed a steep fall of around 20 per cent on the Bombay Stock Exchange in a freak / fat finger trade. As per the exchange website, the stock had dipped to Rs 840.55, down Rs 204.50 or 19.56% before recovering ground.