SEVERAL MARKETS IN NORTHERN EUROPE AFFECTED BY A “FLASH CRASH”
by Stine Jacobsen and Nikolaj Skydsgaard
COPENHAGEN (Archyde.com) – European stocks went through a brief slump on Monday morning, a “flash crash” in stock market jargon, which several market participants suspect was triggered by a trader’s error at the start of a session marked by reduced volumes, the day being a public holiday in the United Kingdom.
The Stockholm Stock Exchange was one of the most affected since its benchmark index lost up to 8%. But it was down only 1.08% at 10:15 GMT.
The Copenhagen and Oslo Stock Exchanges also suffered heavy losses for a few minutes and the movement had repercussions, on a smaller scale, in Germany, Italy and France: the CAC 40 index of the Paris gave up to 3.44% around 08:00 GMT but only gave up 1.3% at midday.
Similarly, the broad European Stoxx 600 index fell more than 2% in the space of two minutes around 07:58 GMT but showed a decline limited to 0.8% at 10:15 GMT.
At the same time, the EuroStoxx volatility index experienced a brief surge and reached its highest level since mid-March at 35.99 points before returning to 33.49.
“What happened during those few minutes was very strange,” said Martin Munk, vice president in charge of equity sales at Jyske Bank, adding that many customers had called the intermediary to ask him for an explanation. .
“It’s starting to look like something more technical, it might have been triggered by a trades error or a technical malfunction. It doesn’t seem to have been triggered by an outside event because the information would eventually get out,” he explained.
Broker Nordnet referred to a “flash crash” which caused a brief movement of panic and participants in Frankfurt and London considered that these movements might be explained by the runaway of certain algorithmic transactions or a “fat finger”, a transaction data entry error.
A spokeswoman for stock exchange operator Euronext in Oslo said no market information alone might explain the rapid decline seen just before 0800 GMT.
“We consider this a routine matter, no news in the market can explain such a large move,” she added.
US operator Nasdaq, which operates stock exchanges in Stockholm and Copenhagen, said it was systematically investigating market movements and was in contact with market participants regarding volatility on Monday.
“We see nothing that indicates errors in Nasdaq’s systems at this time,” the group added in an email.
(Reporting Stine Jacobsen and Nikolaj Skydsgaard in Copenhagen, Anna Ringstrom, Helena Soderpalm and Johan Alnader in Stockholm, Terje Solsvik in Oslo, Danilo Masoni in Milan, Sruthi Shankar in London and Hakan Ersen in Frankfurt; French version Marc Angrand, edited by Jean- Michel Belot)
