Showing posts from October 6, 2012

Communication error at Emkay leads to Rs 650-crore selloff; Nifty crashes by 900 points

O n a quiet Friday morning, a young trader at a Mumbai brokerage made what could be the biggest mistake of his life - confusing the value of a client's order with the number of shares. Instead of selling stocks worth Rs 34 lakh, he punched in orders that amounted to a Rs 650-crore selloff. Within seconds, the market went into a tailspin and his employer Emkay Global was left scrambling for cash. It was a reminder that the stock market, often perceived as a barometer for economic prosperity, could be amazingly vulnerable. The bellwether Nifty crashed by 900 points (more than 15%) amid heavy volumes and the market shut down for 15 minutes, with arbitrageurs who cash in on the difference between the spot and futures markets taking a heavy hit. Friday's development may be raised at the meeting between Finance Minister P Chidambaram and the Sebi board. Emkay, whose trading terminals have been frozen following the incident, will have to organise funds by Tues