India said on Saturday its financial markets were safe from "systemic risk" after a more than 900-point "flash crash" in the National Stock Exchange's Nifty index caused by erroneous trading orders.
The Nifty index fell 920 points on Friday with shares in big financial stocks particularly hard hit after a rash of wrong orders forced a brief halt to trading.
"I was assured there was no systemic risk," Finance Minister P. Chidambaram told reporters in financial hub Mumbai after meeting senior officials of the Securities and Exchange Board of India (SEBI).
Friday's fall was compared by market watchers to a "flash crash" in US stocks in May 2010 in which the Dow Jones plunged 1,010 points -- about nine percent -- before recovering losses within minutes.
The minister said the National Stock Exchange was investigating the matter and market regulator Sebi would take action to try to prevent future trading misfires.
The NSE has said there was no technical glitch in its system and blamed the crash on erroneous orders placed by Mumbai brokerage Emkay Global Financial on behalf of an "institutional client".
After an automatic suspension of 10 minutes, designed to ensure stability on the market and avoid wild fluctuations, trading resumed in line with global trends and India's other market, the Bombay Stock Exchange.
Emkay, which placed the erroneous trades, was later suspended from trading at the exchange and could face liability over the 59 mistaken orders.
NSE senior vice-president Ravi Varanasi told AFP on Friday the investigation would be completed soon "into how orders were sent despite controls being in place for trading members".
"But from what I understand, the event stems from a human error," he said, adding the NSE would decide when to lift Emkay's suspension after the probe was completed.
Emkay said it was "investigating the matter".
Friday's incident was at least the third instance since April when trading on the National Stock Exchange has been hit due to incorrect orders.
This comes at a time when competition is set to intensify among India's stockmarket operators with the entry of the MCX Stock Exchange, which is due to start operations next month.
