Human Error, Not Tech, Blamed in Morning Index Scare in India

Gateway of India in Mumbai, where the NSE is based.

This morning, the National Stock Exchange (NSE) of India halted trading for 15 minutes when a primary index, the S&P CNX Nifty, rapidly dropped over 900 points to a low of 4,888.20, after opening at 5,815.00, losing 16 percent of its value.

In a reflection of the frequent technical glitches and subsequent reputation damage suffered by the exchanges reaching back to the Flash Crash in May 2010 in the US, the Securities and Exchange Board of India (Sebi) is investigating the veracity of the exchange's circuit breaker measures as well as order backlogs during the event, according to reporting by the Economic Times of India and Bloomberg Businessweek.

However, exchange officials say that the problem was human rather than technical, and resulted from an array of erroneous trade orders placed on blue-chip stocks by broker Emkay Global, which remains barred from trading on the exchange in the event's aftermath.

Before the crash, the NSE was forecasted higher today following the announcement of a package of new government policies. The Nifty has recovered to 5,746.95 as this story went to press.

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