BSE to probe RIL's 20% stock fall

The Bombay Stock Exchange (BSE) said it was investigating trading in Reliance Industries shares, after the country’s biggest company plunged 20 per cent in a few seconds before recovering most of its losses.

The stock dropped Rs 205.05 to Rs 840.55 at 12.50 pm local time, sending the Sensex down as much as 3.7 per cent. Reliance ended 3.4 per cent lower at close of trading.

Kalyan Bose, spokesman at the exchange, said it was looking into the transactions. However, Reliance’s Mumbai-based spokesman Tushar Pania said he was unaware of the trade.

Japan’s Nikkei 225 Stock Average sank 1.1 per cent in a brief plunge when the market opened today, after Deutsche Bank AG sent a spate of erroneous sell orders for futures contracts. Futures and computer-driven trading has been under review by US regulators since a 9.2 per cent plunge in the Dow Jones Industrial Average on May 6.

“Incidents like these show the need for circuit filters,” said Shashank Khade, who manages funds for wealthy clients at Kotak Securities in Mumbai. “After events in the US and Japan, it looks like regulators might enforce filters,” he added.

The exchanges enforce circuit breakers in the event of a sharp fall or rise in the markets. The filter limits for stocks range from two per cent to 20 per cent. No price bands are imposed on shares trading in the futures and options, according to rules posted on the NSE website.