NSE blames Emkay for triggering circuit breakers on Nifty
Moneylife Digital Team 05 October 2012

Emkay Global apparently placed non-algo market orders for an erroneous quantity and value of Rs650 crore

The National Stock Exchange (NSE) has blamed a brokerage house, Emkay Shares & Stock Brokers, for triggering circuit breakers on the Nifty, which led to closing of the cash market and a huge fall, about 800 points in the index.


"The market circuit filter got triggered due to entry of 59 erroneous orders which resulted in multiple trades for an aggregate value of over Rs650 crore. These orders have been entered by a trading member Emkay Global Financial Services on behalf of an institutional client," NSE said in a release.


"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," it added.


The markets opened normally today. However at 9.50am, the Nifty circuit filter got triggered, which immediately closed the cash market. The fall in Nifty was apparently due to 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 10.00am and trading resumed at 10.05am. The market is functioning normally and the incident is being investigated," NSE said.


Trading on the BSE was normal. In a release, the exchange said, "The market at BSE is working fine and trading members are informed that there are no issues technical or otherwise at BSE."  However, the BSE index Sensex also fell by about 200 points in reaction to the plunge in Nifty, as there are many common stocks on the two indices.


The incident occurred on a day when expectations were high for a sharp upward rally on the bourses following various reform measures approved by the Union Cabinet last evening, including on FDI in insurance and pension sectors.


Earlier in the morning, Nifty had fallen sharply by about 800 points or 16% to a low of 4,997.6.

Officials from Emkay Global were not immediately available for comments.

Parmod Bhalla
9 years ago
It was a clear case of market manipulation by indulging in basket trading. SEBI should investigate this case and come out with guidelines on max size of a single order for each stock. Otherwise small investors will be always losers in this market.
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