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Nifty Flash Crash – Rs. 10 Lakh Crore Lost in 10 seconds!!!

On 5th October 2012, a lot of investors were shocked and puzzled on how the Nifty fall nearly 900 points which is equivalent to about 15 per cent in just a couple of seconds. It caused the trading to be halted at 0950 hrs for 15 minutes. During that time, the investor wealth was slumped by about Rs 10 lakh crore.

NSE Logo National Stock Exchange

NSE – National Stock Exchange

For the record, the Nifty finally closed the day at 5,746.95 which is down by about 40.65 points or that is 0.70 per cent. This record shows that it had somehow recovered from its initial losses. Looking at Sensex, it ended 119.69 points lower at 18,938.46. This flash-crash had triggered an investigation by the Market regulator.

According to NSE, the problem was not caused by malfunctioning of their system but rather it was caused by a mistake in the trade order by Emkay Global which is now disabled by the bourse for trading. Whatever the cause is, the incident just shows that there is a problem with the system and it needs to be fixed before it becomes problematic again.

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