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Home / Markets / Stock Markets /  Coronavirus triggers circuit: How D-Street extremes work

NEW DELHI: Indian stock markets halted trade for 45 minutes soon after open on Friday, as benchmark indices, Nifty 50 and Sensex, hit the 10% lower circuit -- a first since the 2008 financial crisis.

The rout followed a meltdown in global equities which saw a massive sell off on risk-averse sentiment amid the COVID-19 pandemic.

As per norms of Securities and Exchange Board of India, if indices decline by 10% before 1 pm, trade on stock exchanges will be halted for 45 minutes.

If the stocks had declined 10% between 1 pm and 2.30 pm, there would have been only a 15-minute halt. A fall in the last hour of the session does not call for a halt.

If indices decline 15% before 1 pm, stock markets would be shut again, this time for 1 hour 45 minutes. In case they slump between 1 pm and 2.30 pm, the halt would be for 45 minutes.

A breach of the 15% circuit limit would result in closure of trade for the rest of the day.

In the worst case scenario, if the 20% circuit is hit at any time of the day, the exchanges will be shut for the remaining session.

So far, there is no record of the Nifty or Sensex ever breaching the 20% mark. The worst fall for the Sensex was a 16.2% fall in 1990.

Same rules apply when indices surge as many points.

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