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01-03-2010, 07:05 PM #1
New circuit breaker norms from Jan 4
A movement of 1,750 points in the sensitive index of the Bombay Stock Exchange (BSE), either way will automatically stop trading during the fourth quarter of the fiscal, from January 4.
In case of the National Stock Exchange (NSE), a movement of 520 points in the Nifty will lead to triggering of the circuit breaker.
Circuit breaker refers to the automatic halt of trade following massive jump or slide in the market. The last time the markets were paused in such a situation was on May 16, when the result of the last general election was announced, giving a thumping victory to UPA.
The duration of the halt will depend on the time at which the circuit breaker is triggered.
Both the exchanges follow the market-wide circuit breaker system, which is applicable at three stages of the index movement either way at 10, 15 and 20 per cent. This circuit breaker brings about a coordinated trading halt in all equities and equity derivatives markets nationwide.
In a statement, the BSE said the absolute points of Sensex variation (over its previous day's closing) which would trigger a market-wide circuit breaker for any day in the quarter will be 1,750 points (10 per cent), 2,625 points (15 per cent) and 3,500 points (20 per cent).
The NSE said in the Nifty, a movement of 520 points (10 per cent), 780 points (15 per cent) and 1,040 points (20 per cent) will trigger the circuit breaker. The new trigger points have been arrived at on the basis of closing of the Sensex and Nifty on December 31.
The circuit breakers will get triggered by the movement of either the Sensex or the Nifty, whichever is breached earlier.
The exchanges said the percentages are translated into absolute points of index variations (rounded off to the nearest 25 points in case of the Sensex and 10 points for the Nifty).
At the end of each quarter, these absolute points of index variations are revised and made applicable for the next quarter.
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