Indian probe after big falls in Tata Motors, Ultratech stock

India's National Stock Exchange said Friday it would investigate whether a trading error caused an unexpected 10-percent fall in shares of two major companies, Tata Motors and UltraTech Cement.

Both the stocks slid suddenly about half an hour before the index closed but made back most of their losses within one to two minutes, dealers said.

"The slide was within regulator-set limits," an official from the National Stock Exchange said.

"The matter will be looked into," the official told AFP. The official said that orders were placed at much lower prices but it was unclear why.

"A freak trade or wrong punching of orders could be possible," said a dealer at a state-run brokerage.

India's market regulator, the Securities and Exchange Board of India, in December imposed pre-trade order limits and tighter risk-management controls at stock exchanges to prevent free-falls or price manipulation by brokers.

This was in response to a more than 900-point "flash crash" on the NSE's benchmark Nifty index two months earlier, caused by erroneous trading orders which forced a brief halt to trading.

On Friday, shares of Tata Motors and UltraTech Cement also fell on the main Bombay Stock Exchange (BSE).

At the NSE, Tata Motors closed down 1.68 percent at 293 rupees and Ultratech finished 1.71 percent lower at 1,870 rupees. At the BSE, the Tata stock ended 4.36 percent down at 285 rupees and Ultratech 2.17 percent off at 1,860.85.