Ten minutes into trading, the Nifty index hit its lower circuit, down 10 percent at 8,624. Post hitting the circuit, the trading has been halted for the Nifty for a period of 45 minutes. The pre-market trading will now resume at 10:05 am and the market will open again at 10.20 am.

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So what happens when a benchmark hits a lower circuit?

The index-based market-wide circuit breaker system applies at 3 stages of the index movement - At 10 percent, 15 percent and 20 percent

These circuit breakers when triggered bring about a coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by the movement of either the BSE Sensex or the Nifty 50, whichever is breached earlier. The market shall re-open, after an index-based market-wide circuit filter breach, with a pre-open call auction session.

With 10 percent as the trigger limit, the trading halts for 45 minutes, if the circuit is hit before 1 pm. For 15 minutes, if the circuit is hit between 1 pm and 2:30 pm. However, if it is hit after 2:30 pm, there is no halt in trading.

Similarly, in case of a 15-percent lower circuit, the trading is halted for 1 hour 45 minutes before 1 pm, 45 minutes between 1 pm and 2 pm, and for the remainder of the day, if hit post 2 pm.

In case, the benchmark hits a 20-percent lower circuit, the trading is stopped for the rest of the day, irrespective of the time.

First Published:Mar 13, 2020 9:48 AM IST