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The market began with the lower circuit, stopping trading for 45 minutes | Sensex falls to 3934 points
Fearing the spread of coronavirus
(COVID-19), the country's markets opened with a sharp decline. Due to which the
lower circuit had to be installed within the market within the first half an hour.
BSE slipped 10% or 2991.85 points to reach 26,924.11. Similarly, the Nifty
moved 9.63% or 842.45 points down to 7,903. However, when the market resumed
trading 45 minutes later, the decline further increased. Today, the Sensex fell
3,934.72 points to 25,981.24 and the Nifty closed 1,135.20 points down at
7,610.25. Earlier, on March 13, the market also had a lower circuit. However,
recovery was also done that day.
3 reasons for market
falls
1. Due to the spread of coronavirus (COVID-19) infection,
many states of the country have been locked-down till 31 March.
2. Foreign investors are continuously withdrawing money from
the Indian market. They have sold shares worth Rs 50,000 crore in about two
weeks.
3. Markets worldwide are declining due to fear of spreading
coronavirus (COVID-19) infection. The Hong Kong market saw a 5% decline.
Lower circuit means
very bad time to market
The circuit was started by SEBI
guidelines following July 2001. The circuit is put in place to stop the sudden
ups and downs in the Indian stock market. There are two types of these. Upper
Circuit and Lower Circuit. The upper circuit is placed when the market exceeds
a set limit. And when the decrease exceeds the same limit, a lower circuit is
used. SEBI has fixed three trigger limits for the circuit at 10%, 15% and 20%.
That is, 10%, 15% and 20% of the market that is on the market at the time - the
circuit starts. On Friday, after the sharp fall in the market, the lower
circuit was put in the Sensex.
1. When the stock market falls or rises by 10% before 1 pm,
trading is stopped for 45 minutes.
2. If there is a 10% fluctuation after 1 pm then the business
is stopped for only 15 minutes.
3. If the stock market fluctuates 15% before 1 pm, trading is
stopped for 1 hour 45 minutes.
4. If there is a 20% fluctuation in the stock market at any time during trading, then the trading is stopped for the rest of the day.
A lower circuit in stock
market for the second time in 10 days
- The first circuit in the history of the Indian stock market came on December 21, 1990, when the Sensex dropped 16.19%. After its fall the stock market reached the level of 1034.96.
- The second-biggest drop in the Sensex was on 28 April 1992. The Sensex was down 12.77% then. The stock market closed that day at 3896.90.
- The third event occurred on 17 May 2004, when the stock market lost 11.14%. The stock market closed at the level of 4505.16.
- On 24 October 2008, the Sensex was down by 10.96%. The stock market closed that day at 8701.07.
- On 13th March 2020, the circuit was hit by a 10% drop, but the Sensex improved in subsequent trading. The Sensex had closed at 34,103.48 on that day.
The market was upon
Friday
The country's markets closed in the
lead on Friday due to the steps taken by the government and RBI. The Sensex was
up 1627.73 points at 29,915.96 points and the Nifty closed 482.00 points higher
at 8,749.70 points. At the same time, there was a decline in American markets.
The Dow Jones dropped 913 points to close at 19,174. Similarly, the Nasdaq
Composite was down 271 points at 6,879.52. The S&P fell 104 points to
2,304.92 points.
The market cap of companies listed on
BSE has decreased by Rs 10 lakh crore due to the sharp falls in the Sensex.
After the market closed on Friday, the market cap was Rs 116.09 lakh crore,
which has now come down to Rs 105.91 lakh crore. The rupee opened at 75.69
against the dollar and slipped below 76 shortly. This is the lowest level ever.
Company
|
Share falls in %
|
BPCL
|
8.41%
|
Hindustan Petroleum
|
6.43%
|
Indian Oil
|
4.23%
|
Banking sector shares fall by 12%
Company
|
Share falls in %
|
Axis Bank
|
12.72%
|
ICICI Bank
|
11.80%
|
SBI
|
6.99%
|
Bank of Baroda
|
6.17%
|
Kotak Mahindra
Bank
|
6.15%
|
PNB
|
4.97%
|
Also read: SBI reduces interest rates on FD, know latest rates of SBI, HDFC Bank and ICICI Bank
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