Algorithm mis-trade led to Infosys price plunge

Brokers had a message waiting from the National Stock Exchange (NSE) on Monday as they switched on their terminals.

It said the exchange had identified the algorithm that caused the sudden crash in the share price of Infosys on Friday.

The exchange has asked the broker to desist from using algorithms.

It has also made a full report of the matter to the Securities and Exchange Board of India.

There are rumours of a foreign brokerage being involved, but NSE has not named any.

A senior official from the rumoured brokerage denied knowledge of the matter.

There had been a sudden, sharp fall in the price of Infosys futures, which fell 19.27% during the day to 1950 before rebounding to end at 2412.95, down only 0.11% over the previous day.

The same day, the market saw a sharp fall of over 1.6% in the afternoon session when the April Nifty futures, which were trading at 5315, suddenly dipped to 5000.

The NSE message did not mention any algorithm being involved in the Nifty fall.

The matter is said to be still under investigation.