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The cause for an anomalous stock market trading on Friday has been identified.
The Securities Regulatory Commission says it was not human error, but design flaws in a software of China Everbright Securities that triggered the mysterious surge in the stock markets.
A spokesperson for the commission says the Everbright proprietary strategy trading system has flaws in program call and limit control, which resulted in huge orders at market prices.
On Friday, the benchmark Shanghai Composite Index started the day lower and then inexplicably began roaring up in the mid-morning.
At the peak, the index spiked nearly 6 percent.
The total declaration for buying hit 3.8 billion U.S. dollars, while the actual transactions topped 1.2 billion dollars.
SOUNDBITE (CHINESE) WANG XIAOJUN, Cinda Securities analyst:
"Today's surge was unexpected. Although it's relatively small-scale, the incident has sounded the alarm for investors to step up vigilance."
Analysts say China's regulatory body and institutional investors should strengthen risk control and management, and that they must not underestimate risks brought by small incidents in the financial market.
