China Trading Error Reduces Investors Confidence In Stocks

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The Chinese stock index has tumbled 40 percent from its August 2009 high, erasing about $644 billion in market value, as the world’s second-largest economy slowed and local investors emptied more than 2 million equity trading accounts. Source: ChinaFotoPress via Getty Images

China Trading Error Reduces Investor Confidence in Stocks By Bloomberg News August 18, 2013 9:49 PM EDT 6 Comments

The biggest swing in China’s benchmark equity index since 2009 threatens to further erode confidence in the nation’s stock market after it lost more money for investors than any in the world during the past four years. China’s shares were roiled Aug. 16 by a trading error at Everbright Securities Co. (601788) that spurred a 53 percent surge in volumes and a swing of more than 6 percent in the Shanghai Composite Index. The gauge jumped from a loss of as much as 1 percent to a gain of 5.6 percent in two minutes during the morning session, then ended the day with a 0.6 percent drop. Erroneous buy orders from Everbright’s proprietary trading group sparked the early rally, the securities regulator said.

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