In the first trading day after the general Lok Sabha election 2009, in which the UPA alliance is set to form the new government without the support of the left front, the Indian bourses – Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) – zoomed sharply and breached the upper circuits two times that led the authority to halt the trading for the entire day.
On the back of positive political news, the investors rushed to the Indian stock market despite the negative global scenario. The in cash and derivative segments in both the BSE and the NSE hit the 15% upper circuit with opening of the market that caused the two hours halt.
This was the best ever opening of Indian Stock Exchange.
At 11.55 am, the market opened again but within five seconds of opening, it breached the highest 20% circuit and the authorities had to close it for the entire day. Now, the fresh trading will begin from its schedule time on Tuesday.
In the second opening, the Sensex – the pack of 30-share index of the BSE zoomed to 2099 points to 14,272 while the Nifty – the pack of 50-share index of NSE surged to 17.3% to 4,308.
It is the first time that trading has been halted for the full day on the BSE and the NSE.
Earlier in the morning, the Sensex rose sharply to 1,305.97 points while Nifty 712 points, breaking the 15% landmark of second circuit set by Securities and Exchange Board of India, the market regulator.
If the indices swing 10% positive or negative before 1 pm in the stock exchanges, there would be 1-hour trading halt and if it happens between 1 p.m. to 2:30 pm, there will be one and half hour halt. In case the movement takes place at and after 2:30 pm, there would be no halt and the market would continue.
When a 15% swing occurs in either index before 1 p.m., there would be a 2-hour market halt, and it happens between 1 p.m. to 2:30 p.m., there will be one hour halt. In case, if the market breaches the 15% circuit after 2 p.m, the halt occurs for remaining of the day.
And, when the market swings sharply by 20%, there would be no trading for the whole day.
The circuit formula is also applied on the sectoral indices and individual stocks too, which is reviewed every quarter by the stock exchanges.
On Monday, on the sectoral indices front, Realty whizzed 25.37%, Capital goods rose 23.47%, Bankex rocketed 20.27%, Oil & gas zoomed 19.57% and Power surged to 17.09%.
While in the individual stocks, Bharat Heavy Electricals (32.72%), Larsen & Toubro (29.53%), Reliance Capital (26.95%), ICICI Bank (25.30%), Housing Development Finance Corporation (23.46%), and Reliance Industries (22.87%) became the major gainers in the Sensex.
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