Everbright Securities, the nation's ninth-largest brokerage by assets, disclosed the trading error in a statement filed to the Shanghai exchange. Board Secretary Mei Jian declined to comment further when contacted by Bloomberg News. The company's shares were suspended in Shanghai trading. China Everbright Ltd., which owns a stake in Everbright Securities, declined 5.5 percent in Hong Kong.

PetroChina Co. and Industrial & Commercial Bank of China Ltd., the nation's two biggest companies by market value, jumped as much as 10 percent in Shanghai before paring gains to trade little changed by the close. Volume in PetroChina was 239 percent above the three-month average and it was 269 percent greater than the average for ICBC, according to data compiled by Bloomberg.

Eoin Treacy's view In an era of increasingly automated trading, “fat finger” mistakes are becoming uncomfortably frequent. More often than not, these types of events result in sharp declines but on this occasion the intraday rally was unwound steadily following the lunch time break. However, the impact of sentiment in either scenario is to increase uncertainty.

The valuations of the Chinese market are in its favour. However, continued speculation about the scale of the non-performing loans issues and how exposed regional governments are continues to weigh on sentiment. Until we have some visibility on how large this issue is and how it will eventually be dealt with, uncertainty is likely to continue to take a toll on sentiment.

The healthcare sector pulled back sharply this week, suggesting a process of mean reversion is underway. The information technology sector has paused below 1600 since the beginning of the month in a process of mean reversion. A sustained move below the 200-day MA would be required to question medium-term potential for higher to lateral ranging.