Now Reading: Fat-finger error likely caused 271-point Nifty plunge
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Fat-finger error likely caused 271-point Nifty plunge
A suspected fat-finger error on the Bharti Airtel counter triggered a sudden 271-point slump in the Nifty during the closing auction session (CAS) on Wednesday. In just 30 seconds after the order…
A suspected fat-finger error on the Bharti Airtel counter triggered a sudden 271-point slump in the Nifty during the closing auction session (CAS) on Wednesday. In just 30 seconds after the order session opened at 3:20 pm, the index fell 1.11% to 24,005.5 from its reference rate of 24,276.9. It recovered to close at 24,207.75, down 0.28% from the reference rate.
The plunge was attributed to a buy order placed at Rs 1,857.7 for Bharti Airtel, 3% below its reference price of Rs 1,915.1. Traders said a seller unexpectedly matched that low bid, suggesting an accidental keyboard error. Bharti Airtel was the most active CAS stock, accounting for Rs 68.25 crore of the total Rs 1,085.18 crore auction volume. The stock recovered to close at Rs 1,902.1, helping the Nifty trim its final loss to 126.80 points.
Indian Opinion Analysis
The CAS mechanism, introduced on 3 August for 213 derivative stocks including Nifty 50 constituents, determines a single equilibrium price based on orders placed between 3:20 pm and 3:30 pm. On its debut day, the Nifty surged 200 points due to low supply, and Wednesday's opposite swing shows how thin participation amplifies single-stock errors. Low retail and arbitrage fund activity continues to make the session volatile. The Securities and Exchange Board of India (Sebi) allows orders up to 3% above or below the reference rate, but a fat-finger error at that limit is rare. Market participants expect the session to gain depth as more investors adapt. The next test will be whether the NSE clarifies if any trade-review mechanism can catch such mismatches before settlement.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
