Nikolaj Skydsgaard, Stine Jacobsen

COPENHAGEN (Reuters – European stocks fell suddenly on Monday, before partially recovering in what brokers called a “flash fall” or an erroneous trading on a day when there was less activity due to holiday trades.

After falling by 8.8%, the Stockholm benchmark stock index suffered the most severe losses. It then recovered to trade at 1.2% at 09:42 GMT. Some other indices fell, too, in France, Germany, Italy, Denmark, Norway and Germany. However, they recovered later.

This sudden action caused the pan-European equity benchmark to extend its fall by more than 2 percentage points within a matter about two minutes starting at 0758 GMT. However, volumes were reduced due to London’s holiday closure.

An indicator of volatility in euro zone stocks saw an abrupt spike and reached its highest level since mid-March at 35.99.

Martin Munk (Vice President of Equity Sales at Jyske Bank), said that it was strange in those few minutes. He also mentioned that worried clients called him asking about what was going on.

“It is starting to smell more technical. It may have been triggered due to an error in trade, or a technical problem. “It doesn’t seem like it was caused by some event outside of the world because that would have hit us now,” he said.

Nordnet Brokers said it was a sudden “flash” crash that caused market panic. London and Frankfurt traders said they thought the huge move may have been the result of algos acting out or big trades.

Euronext Oslo spokeswoman said that there is no information on the market to explain the sudden decline.

Euronext Oslo spokeswoman Cathrine Segerlund stated that they are investigating the matter as routine. “There was no market news to explain this large movement.”

Nasdaq stated that it constantly monitors the price movement on its marketplace place and is in dialogue with market participants about Monday’s volatility.

In an email, a spokesperson from Nasdaq said that they do not see any errors in its own systems.