'Fat finger' trade sends Dr Reddy's down 10%

Mumbai: Dr Reddy's Laboratories witnessed a sudden 11 per cent drop in its stock price in early trade on Tuesday. Dealers attribute the brief crash to a fat finger trade as the stock recovered soon after the unexpected drop.

The stock, which was trading at 2,766.3 at about 9.39 am on the BSE, plunged to a low of 2,447.05 at 9.40 am. At it's day's low the stock was down 10 per cent versus the previous day's closing price. Dealers said that about 1.96 lakh shares got traded in cash in a matter of minutes. The stock recovered soon to end down 2.25 per cent at 2,657.80 .

"It is mostly a fat finger trade. Some FII was also aggressively selling," said an institutional dealer at a domestic firm.


"The way the stock price has corrected and recovered on Tuesday, it looks like a fat finger trade. On Friday, Bank Nifty also dropped 800-900 points in a few minutes because HDFC Bank and Kotak Bank dropped suddenly," said Jay Purohit, derivative analyst at Centrum Broking, "Upside in Dr Reddy's is likely to be limited to 2,800-2,850. There are chances it might correct to 2,400," said Purohit.

This is the second time in this year that stock has seen a sharp drop. On February 15, it slumped 23 per cent in intraday trade on USFDA flagging concerns at a key unit.

The stock had slumped 23 per cent in intraday trade on February 15 after a research report said that the US drug regulator had flagged some concerns regarding the company's Bachupally unit-a key plant.