European stocks fall after flash crash, error

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European stocks fall after flash crash, error

COPENHAGEN Reuters - European stock prices fell on Monday after recovering in what was described as a flash crash or a erroneous trade on a day when a holiday slowed trading activity.

After falling by 8% at one point, the Stockholm benchmark stock index reduced most of its losses to trade down 1.2% at 0942 GMT. Other indices sank, including in countries from Denmark and Norway, Germany, Italy and France, but later recovered.

The pan-European STOXX 600 equity benchmark fell by over 2 percentage points in a matter of around two minutes from around 0758 GMT, although the closure of London for holiday reduced volumes.

A measure of euro zone stocks' volatility also saw a sudden spike to hit its highest since March, at 35.99.

Martin Munk, a vice president of equity sales at Jyske Bank, said it was weird in those minutes that many worried clients had called in asking what was going on.

It's starting to smell of something more technical, it may have been caused by an erroneous trade, technical malfunction. He said that it doesn't look like it was triggered by an event out in the world, because that news would have hit us by now.

The sudden move was caused by a flash crash that caused a market panic, according to brokers, while traders in Frankfurt and London said that the outsized move might have been caused by algos going haywire or a big fat finger trade.

A Euronext Oslo spokeswoman said there was no news in the market that could explain the rapid decline.

There isn't a news in the market that could explain such a large move, according to Euronext Oslo spokesperson Cathrine Segerlund.

Nasdaq constantly investigates price movements on its market place, and is in a dialogue with market participants over Monday's volatility.

A person for the exchange said in a spokesman for the exchange said there was no indication that Nasdaq's own systems had errors.