The National Stock Exchange (NSE) claimed there was no technical glitch in its system and blamed the crash on erroneous orders worth over Rs 650 crore for multiple trades by broker Emkay Global in various stocks at low prices on behalf of an "institutional client".
While NSE said it is investigating into the incident, sources said market watchdog Sebi has also begun a probe into the 'flash crash' due to which trading was halted on the exchange for about 15 minutes.
Sebi is looking into all aspects of the incident, including the probability of technical problems or any intentional manipulative activities by some vested interests, a senior regulatory official said.
The incident occurred on a day when expectations were high for an upward rally on bourses, following some big-ticket reform measures approved by the government last evening, including on FDI in sectors like insurance and pension.
A number of investors and traders, who were hoping for bullish trend in the market suffered losses due to the incident, which triggered steep losses in the futures market, a broker said.
The regulator would look into the entire trading pattern of broker concerned Emkay Global, which has been disabled by NSE from trading for now, as also the trade details of the affected stocks, the official added.
Sebi would look into whether adequate safeguard mechanism was in place to avoid a 'flash crash' like situation, as the so-called freak trades were executed in a number of well-known blue chip stocks, including some large banking shares. MORE