Major Chinese brokerage firm China Everbright Securities suspended its trading in domestic A shares yesterday after a trading error potentially resulted in a sudden spike on the Shanghai Composite Index.
Rumours are circulating that the issue derived from an Everbright broker mistakenly switching a mock trading session into a live one. Everbright lost over eight per cent on the news.
SSE confirms problem in Everbright Securities operation pic.twitter.com/yddMFNl3vr— Xinhua News Agency (@XHNews) August 16, 2013
The Shanghai Composite posted its biggest intraday jump since March 2009 last night, rising around 5.6 per cent.
The spike prompted trader speculation as to the cause, with possible explanations ranging from government intervention to create a stock market rally, to a technical move against short positions led by Chinese banks.
The bourse said it is investigating the incident.