Cyprus Mail
Banking and FinanceBusinessInternational

Brief crash hits European stocks in holiday-thinned trading

brief crash stocks

European stocks suddenly fell on Monday before partly recovering in what brokers described as a “flash crash” or an erroneous trade on a day where a holiday-thinned trading activity.

The Stockholm benchmark stock index (.OMXS30) was amongst the hardest hit and after falling by 8 per cent at one point it later pared most of the losses to trade down 1.2 per cent at 0942 GMT. Other indices also sank, including in countries from Denmark and Norway, to Germany, Italy and France, but later recovered.

The sudden move sent the pan-European STOXX 600 (.STOXX) equity benchmark extending its fall by over 2 percentage points in a matter of around two minutes from around 0758 GMT, although the closure of London for holiday reduced volumes.

A gauge of eurozone stocks’ (.V2TX) volatility also saw a sudden spike to hit its highest since mid-March, at 35.99.

“It was weird in those minutes there,” Martin Munk, vice president of equity sales at Jyske Bank, said, adding that many worried clients had called in asking what was happening.

“It’s starting to smell of something more technical, it may have been triggered by an erroneous trade, a technical malfunction. It doesn’t look like it was triggered by an event out in the world, because that news would have hit us by now,” he added.

Brokers Nordnet said the sudden move was a “flash crash” that caused a brief market panic, while traders in Frankfurt and London said the outsized move might have been caused by algos going haywire or a big “fat finger” trade.

A Euronext Oslo spokesperson said there was no news in the market that could explain the rapid decline.

“We are looking into this as a matter of routine, there was no news in the market that could explain such a large move,” Euronext Oslo spokesperson Cathrine Segerlund said.

Nasdaq said it continuously investigates price movements on its marketplace, and was in a dialogue with market participants over Monday’s volatility.

“We currently see nothing to indicate errors in Nasdaq’s own systems,” a spokesperson for the exchange said in an e-mail.

Follow the Cyprus Mail on Google News

Related Posts

Christodoulides visits LNG terminal as work restarts

Tom Cleaver

Newspaper sales slump forces Italy’s iconic kiosks to shutter

Reuters News Service

Cyprus bolsters maritime ties at European Cruise Summit

Kyriacos Nicolaou

Cyprus Business Now

Kyriacos Nicolaou

Defence budgets and socioeconomic implications

CM Guest Columnist

TikTok’s US revenue hits $16 bln as Washington threatens ban

Reuters News Service