During the early trading on the stock market today, there was such a decline that the lower circuit started. After which the trading was stopped in the market for 45 minutes. This was the second time in March when a lower circuit was introduced in the market. This is the sixth time in the history of the stock market. Currently, before March 2020, 2008, 12 years ago, a lower circuit was introduced in the stock market. When the market started the lower circuit, at that time the Sensex fell by 2,991 points to 26,924 and the Nifty dropped 824 points to 7,903.
What is lower or upper circuit
The lower or upper circuit is an automatic mechanism for the stock market that is applied during trading to prevent a large drop in security or index, or a large upside. It helps in dealing with large volatility in the market.
10 percent lower circuit rules
Today, within a few minutes of trading in the stock market, the Sensex fell by about 10 percent. After which the business had to be stopped. According to the rule, if the 10 percent fall comes before 1 pm, the business is stopped for one hour in the market. Business starts again after 45 minutes after 15 minutes of pre-open session.
At the same time, 10 percent of the lower circuit starts after 1 pm, then the business goes for 30 minutes. After 2.30 pm, business continues when 10 per cent lower circuit is installed.
15 percent lower circuit
If the 15 per cent decline in the index comes before 1 pm, then the business is stopped for 2 hours in the market. Business stops for one hour after 15 per cent decline after 1 pm. But if the circuit of 15 per cent is installed after 2.30 pm, then the business continues.
20 percent lower circuit
If the Sensex or Nifty declines by 20 per cent, then business is not started on that day. The market closes for that day and trading is started the next day.
The reason behind the decline in the market
Due to the Corona virus outbreak, major US markets fell on Friday on Thursday. The Dow Jones closed down more than 900 points on Friday. At the same time, there is a huge sell in Asian markets today.
The number of corona patients in India has gone beyond 400. So far, there have been 7 deaths. The government is fully alert about this and a lockdown has been declared in many cities. Investors are also scared by the increasing cases of Corona in India.
Price-wise continues between the OPEC and the non-OPEC due to the price war on crude. Due to this, there has been a huge drop in the prices of crude. Crude again weakened to a level of $ 26 a barrel on Monday.
Today the rupee also recorded a decline and it went down to 76.15 per dollar.