Indian “flash crash” hits stocks with 16% drop due to broker error

After the infamous May 6, 2010 U.S. “Flash Crash”  in which the Dow Jones Industrial Average dropped about 1,000 points or 9% in minutes, only to recover those losses almost immediately, today it was the turn of the Indian stock market to do the same.

The Indian market saw its “flash crash”  wiped some $60 billion off the value of India’s leading companies, with a 16% drop in the main index causing the Mumbai exchange to temporarily stop trading in stocks known collectively as the “Nifty Fifty”.

The crash was caused by orders worth $126 million being entered incorrectly by a Mumbai based brokerage house, Emkay Global, apparently due to human error not rogue algorithmic trading as was the case in the U.S. crash.

Contrarian Investor UK