Trading in China Everbright Secs shares suspended after index flash rally
SHANGHAI Aug 16 (Reuters) - Trading in domestic A shares in major brokerage China Everbright Securities, was suspended in the afternoon, the company announce, following a dramatic spike in domestic stock indexes Friday morning.
Widespread rumours circulated in China's stock market this morning that erroneous trading orders from Chinese brokerages to buy index heavyweights had caused the Shanghai Composite Index to briefly jump as much as 5.6 percent, led by major financial stocks, before falling back.
The startling rise in the market caused public speculation as to the cause. In addition to rumours about brokerage trades, some argued that the government is instigating a wider stock market rally, or that it was an technical move against short positions led by Chinese banks. The Shanghai Stock Exchange has said it is investigating the incident but denied it was the result of a computer error at the exchange.
(Reporting by Lu Jianxin and Pete Sweeney)