China Everbright Securities has admitted something has gone wrong with its proprietary trading unit, indicating that that could be the cause of a startling rise of domestic A-share stocks this morning.

Problems occurred during the process of an arbitrage system in the proprietary trading unit, the  Investment Strategy Department, at the brokerage this morning, Everbright Securities said briefly in a filing this afternoon.

Other businesses of the company remain normal, it added.

Hours before the announcement, Everbright Securities board secretary Mei Jian had denied rumors of traders in the brokerage mistakenly handling deals of 7 billion yuan.

According to the 21st Century Business Herald, the snafu was a result of a sudden shift from the mimic panel to actual trading.

It added that the brokerage had already sacked all staff at the compliance department.

Trading in domestic A shares in the major brokerage was suspended in the afternoon following a dramatic spike in domestic stock indexes.

Major A shares witnessed a skyrocket of around 5 percent in the morning session, led by major financial stocks, before falling back.

Affected by the incident, network security-related stocked rallied this afternoon, with Bluedon Information Security Technology Co Ltd (300297:Shenzhen) up 7.14 percent and for Beijing Venustech Inc (002439:Shenzhen) rising 4.10 percent at today's closing.

The Shanghai Composite Index ended the day 0.6% lower at 2,068.45 after swinging to a 5.6% jump from a 1% loss earlier in the day, before sliding back into losses.