Market regulator Sebi has begun initial probe into the 'flash crash' of NSE index Nifty, which fell by nearly 900 points on Friday morning halting the trade on the exchange for about 15 minutes.

While the National Stock Exchange (NSE) blamed 'abnormal' orders placed by stock broker Emkay Global in multiple trades of various stocks at low prices for the crash, sources said that regulator is looking into all aspects of the incident.

NSE has claimed there were no technical glitches in its system and the crash was due to 'erroneous' trade orders worth over Rs 650 crore by Emkay Global, which has been now disabled by the bourse for trading.

However, a senior regulatory official said that Sebi would look into whether adequate safeguard mechanism was in place to avoid a 'flash crash' like situation, as the so-called freak trades were executed in a number of well-known blue-chip stocks, including some large banking shares.

While there are no circuit filters in large blue-chip stocks, the market systems are generally well-prepared to handle any mischief or large erroneous trades.

The regulator is also concerned that the instances of 'freak trades' seem to be on the rise, including the recent one that involved the shares of Reliance Industries.

NSE said the abnormal orders were 'non-algo' in nature and were entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book. The exchange has also identified these orders to a specific dealer terminal.

The incident occurred on a day when expectations were high for a significant upward rally on the bourses, following some major reform measures approved by the government last evening, including on FDI in sectors like insurance and pension.

Sebi is also looking into the issues related to 'algorithmic' trade -- a latest-technology mechanism that allows execution of orders at a very high speed to take benefit of smallest of the change in share price, the official said.

This trade mechanism has been criticised in various quarters on apprehensions that it helps market manipulators to take benefit of the high-speed technology.

The trading had commenced normally today at both the BSE and the NSE, with the Nifty opening with a gain of nearly 27 points.

While trading continued normally at BSE, a 'flash crash' like situation occurred later in the morning at Nifty.

The NSE index showed a sudden fall of nearly 900 points or over 15 per cent within seconds, triggering the circuit filter (maximum permissible limit of movement in the index), halting the trade at 0950 hours.

The NSE, on its part, said that the exchange's systems functioned normally without any glitch and the abnormal trades caused market closure automatically as the index circuit filter was triggered.

Trading resumed at NSE at 10.05 am, NSE said, adding that the market is functioning normally since then and the incident is being investigated.

At 2 pm, the markets were still trading in the red, although the decline in Nifty was much lower at 46 points. The BSE index Sensex was trading 140 points down at 18,917 points.

The Sensex had also fallen about 300 points in the morning, in reaction to the Nifty crash, as many stocks are common to the two indices.