The BSE Sensex briefly fell to 16,400 on Tuesday as the stock price of Reliance Industries — the biggest company on the index — plunged to Rs 840.55 a share or a fall of almost 20 per cent. RIL’s stock, and the index, recovered almost immediately. It turned out to be a ‘freak trade’. It seems that instead of Rs 1,040.55 a share, the trader punched in Rs 840.55. There is a possibility that the trader punched in the price for ICICI Bank by mistake.
Market watchers can’t re-call an instance of such a magnitude. “These inciden-ts probably keep happening, but never before with such a major company,” says a broker. Meanwhile, various brokers identified as the possible source of the error distanced themselves from the trade.
In early May, the US index Dow Jones crashed by six per cent in 10 minutes after a large sell order. Later reports suggested that an order to sell $16 million worth of shares was typed in as $16 billion — a phenomena nicknamed as ‘fat fingers’. The cost of the Mumbai trade to the broker in question will run into a few crore rupees.