Investors will be keeping a close eye on ETFs that track India on Friday for any unusual moves after its market was the latest to experience a “flash crash” triggered by a glitch related to high-speed trading.
The S&P CNX Nifty Index plunged as much as 16% before trading was halted in India.
“The National Stock Exchange of India said 59 erroneous orders prompted a plunge in equities that briefly erased about $58 billion in value, underscoring the growing global concern about the integrity of financial markets,” Bloomberg News reports.
Exchange traded products that track India include WisdomTree India Earnings Fund ETF (NYSEArca: EPI), iPath MSCI India ETN (NYSEArca: INP), Powershares India Portfolio ETF (NYSEArca: PIN), iShares S&P India Nifty 50 Index Fund ETF (NYSEArca: INDY) and iShares MSCI India Index Fund (NYSEArca: INDA).
Trading volume in India’s equity market more than doubled from the recent average amid Friday’s chaos, Bloomberg said.
“India has joined the big league with this trading disaster,” said A.S. Thiyaga Rajan, a senior managing director at Aquarius Investment Advisors, in the report. “It’s very surprising so many erroneous orders went through. Exchanges and regulators must be one step ahead as systems and technologies upgrade.”
Indian stocks recovered after the erroneous orders were cancelled. India’s National Stock Exchange blamed the plunge on human error, the Financial Times reported.
WisdomTree India Earnings Fund ETF
