* Nifty index dropped more than 900 points, or 15 percent
* Broker Emkay placed 59 erroneous orders, stock exchange says
* Analysts concerned about solidity of trading systems
(Updates with market regulator looking at Emkay trades in graf 8)
By Abhishek Vishnoi and Manoj Dharra
MUMBAI, Oct 5 (Reuters) - A flurry of erroneous orders placed by an Indian broker sent the country's top stock market tumbling briefly on Friday, raising renewed concerns about the stability of trading systems after a series of global market glitches.
Trading on the National Stock Exchange (NSE) was briefly halted after the 59 trades worth more than $125 million were placed, triggering a sudden drop of more than 900 points on the Nifty index, the exchange said.
It said the orders, for an institutional client, were sent from a single dealer terminal at Emkay Global Financial Services
Traders said the NSE's trading systems appeared to have held up well, and the index ended the session down just 0.7 percent.
But Emkay's actions marked the another incident in a glitch-filled year for India's share markets, fuelling concerns about whether they are equipped to deal with potentially much bigger incidents of the type if not the magnitude of the Wall Street "flash-crash" of May 2010.
"Frequent halts of trading have created a lot of confusion in the minds of investors, impacting overall sentiment in the market," said Hiten Gala, a senior manager at brokerage Sharekhan.
Emkay, a financial services firm founded 17 years ago, closed out all the positions from the misplaced trades, the NSE said, adding it had been suspended from trading.
Indian market regulator SEBI was looking into Emkay's misplaced trades, a senior official told Reuters. He declined to be named because the matter has not been officially announced.
Shares in the firm, which did not respond to multiple requests for comment, fell by the daily limit of 10 percent.
"These non-algo (algorithmic) market orders have been entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book, thereby causing the circuit filter to be triggered," the NSE said in an earlier statement.
The NSE gave no further details of the trades and Emkay did not disclose the nature of the error.
Traders said they suspect it involved wrong orders for basket trades involving an index or a series of stocks, as a number of shares appeared to have been impacted.
The glitch halted traded on the NSE, whose $731 billion market value exceeds that of Bombay Stock Exchange's Sensex index
, for around 15 minutes. NSE futures and options markets traded as normal and the BSE was uninterrupted.
Some financial stocks fell sharply before trading was halted, including State Bank of India
and mortgage lender HDFC .
Emkay's trading misfire came after a sudden drop in Nifty futures in April sparked speculation of an erroneous trade, and a poorly conducted share sale of state-run Oil and Natural Gas Corp
in March that analysts blamed in part on the two stock exchanges.
The NSE has strongly defended its trading systems in both incidents, and said on Friday the exchange's trading mechanism "functioned normally without any glitch," sending four separate statements through the day.
But analysts expressed surprise at why multiple bad orders had been allowed to go through, and said the NSE would need to provide more details and reassure markets about the reliability of its trading systems.
"Whether this was a systematic risk and systematic technical snag, it needs to be addressed by the exchanges. Such a mishap should not happen," said KK Mittal, head of portfolio management at Global Capital.
Confidence in India's two established exchanges is an especially sensitive topic for bourse officials, given the impending launch of a new stock exchange, MCX-SX, next month.
MCX-SX promoter Financial Technologies
is the leading provider of front-end trading technology, commanding over 80 percent market share among NSE and BSE terminals.
The NSE spent an estimated 1.16 billion rupees ($22.37 million) maintaining and upgrading its technology last year, according to data from ICICI Securities, representing about 8-9 percent of its annual revenue.
India is not along in suffering trading glitches.
Beyond the flash crash of 2010, U.S. trading firm Knight Capital Group Inc
suffered a technology breakdown that roiled U.S. markets in August and Facebook's $16 billion IPO in May was marred by glitches. ($1 = 51.8650 Indian rupees)
(Additional reporting by Himank Sharma; Writing by Rafael Nam; Editing by Ian Geoghegan, John Stonestreet)
Keywords: INDIA NSE/TRADING