BSE launches index-based circuit breaker system for March qtr

The Bombay Stock Exchange has introduced index-based circuit breaker system for the March quarter, whereby among others, trading in Sensex scrips would be halted if the 30-share benchmark gains 4,100 points in a single day.

The system is applicable at three stages of the index movement either way at 10 per cent, 15 per cent and 20 per cent, according to a BSE circular.

The market wide circuit breakers would be triggered by the movement of either Sensex or the NSE S&P CNX Nifty whichever is breached earlier.

In case of a 10 per cent movement of either of these indices, there would be a one hour market halt if the movement takes place before 1 pm.

If the movement takes place at or after 1 pm but before 2.30 pm there will be a trading halt for half and hour. In case the movement takes place at or after 2.30 pm there will be no trading halt at the 10 per cent level and the market will continue trading, the circular added.

Similarly, in case of a 15 per cent movement of index, there will be a two-hour market halt if the movement takes place before 1 pm. If the 15 per cent trigger is reached on or after 1 pm but before 2 pm, there will be an hour's halt. If this trigger is reached on or after 2 pm the trading will be halt for the remainder of the day.

Further, in case of a 20 per cent movement of the index, the trading will be halted for the remainder of the day, it said.

The absolute points of Sensex variation (over the previous day's closing) which would trigger market wide circuit breaker for any day in the quarter are 10 per cent or 2,050 points, 15 per cent or 3,075 points and 20 per cent or 4,100  points, it added.

Similarly, the absolute points of NIFTY variation (over the previous day's closing) which would trigger market wide circuit breaker for any day in the quarter between January 1, 2011 to March 31, 2011 are 10 per cent or 610 points, 15 per cent or 920 points and 2 per cent or 1,230 points, a NSE circular said.

The circuit breaker brings about a coordinated trading halt in all equity and equity derivative markets nationwide.