The Indian stock market opened on Friday and had to stop trading for 45 minutes within minutes. The Nifty 50 was broken by more than 10 percent, while the BSE Sensex also fell by 9.4 percent to 29867. This is the first time in 12 years that the Indian stock market had to stop trading for some time. This happened due to a lower circuit.
How is Circuit Breaker determined?
The BSE and NSE daily determine index circuit breakers at 10 percent, 15 percent, and 20 percent based on the previous day’s closing level.
What is the Lower Circuit Breaker?
As per SEBI guidelines of 2 July 2001, Indian stock exchanges have to use index-based circuit breakers. The index-based circuit breaker is implemented in 3 steps, looking at the movements of the system indices. It is levied at the level of 10 percent, 15 percent, and 20 percent. Trading in equities and equity derivatives is stopped after a circuit breaker is applied. If either of the two major exchanges in the country – the NSE and BSE’s sensitive indices, the NIFTY or the SENSEX – crosses the level of 10 percent, 15 percent or 20 percent, business is stopped on both exchanges.
When and how long does the business stop after the circuit is installed?
Given the level and timing of the decline in the stock market, it determines how long the business will stop.
Pre Open Session begins after the circuit is removed
There is a 15-minute pre-open session before starting the business again after the circuit is set up. It shows the depth and position of the stock market. The pre-open session does not begin when the business is stopped for the whole day.
How long will the business stop
45 minutes stir before 10 O’clock. 10% stir between 1 pm and 2.30 15 minutes. After 2.30 pm, 10% of the stir will not stop the business. 1 hour 45 minutes of stirring 15 percent before 1 O’clock. 1% to 2pm 15% movement 2 hours 45 minutes. After 2 O’clock, the stir of 15 percent closed the business for the whole day. Business closes for the entire day, whenever there is a stir of 20 percent.
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