Trading was halted momentarily in several markets after major stock indexes plunged for a few minutes just before 10 a.m. Central European time. Stocks in the Nordic region were hit the hardest, though other European stocks also tumbled briefly on a day when share prices around the globe declined.
Nasdaq and Euronext NV, which operate stock exchanges across the region, said they are investigating the cause. Nasdaq said it hasn’t seen any reason to cancel trades.
“This morning one of our traders made an error when inputting a transaction,” a Citigroup spokeswoman said in a statement late Monday. “Within minutes, we identified the error and corrected it.”
The nature and extent of the sales by Citigroup weren’t immediately clear.
Investors thought the incident may have been caused by human error, known in industry parlance as a “fat finger.”
Sweden’s benchmark index, the OMX Stockholm All-Share, fell nearly 8% before largely rebounding. Denmark’s equivalent index fell over 6% around the same time and also mostly recovered. Both closed down around 2%.
Markets run by Amsterdam-based Euronext also tumbled before largely recovering. The Dutch AEX index fell 3% and Belgium’s BEL20 declined over 5%. France’s CAC40 fell 3%. These indexes ended the day down more than 1%.
Euronext temporarily halted trading to try to lower the impact on markets, according to a spokesman. Nasdaq said it used circuit breakers in the immediate aftermath of the crash on major stocks on Nordic exchanges, including Kone Oyj and Stora Enso Oyj.
Fat finger trades can be costly. In 2009, an oil trader on a bender placed around $520 million of trades for crude oil, saddling his company with $10 million in losses. In 2012, financial services firm Knight Capital lost $440 million from a computer-trading glitch that entered millions of trades in less than an hour.
Citigroup has a history of untimely errors. In 2020, it was ordered by regulators to clean up systems meant to safeguard the bank and its clients and fined $400 million. It is spending billions of dollars to transform its technology and inner workings, a cost that has investors anxious. Chief Executive Jane Fraser has said it is the bank’s top priority to get it right.
On Monday, Citigroup shares rose 1% to $48.71 in New York.
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Appeared in the May 3, 2022, print edition as ‘Citigroup Spurs ‘Flash Crash’ in European Markets.’