BSE Sensex hits upper circuit for 2nd Trading Suspended for Today

at 1355 hrs: The Sensex continues to be up nearly 320 points (2.23%) at 14,603.

Market breadth continues to be bullish - out of over 2,635 scrips traded, over 1,890 have logged gains.

DLF is still up 24% at Rs 399. RCom is holding 15% gain at Rs 329. L&T is steady at Rs 1,420 - up 15%.

SBI, M&M, ICICI Bank, ONGC and Maruti are also trading with sharp gains.

Infosys continues to be down over 11% at Rs 1,574. TCS, Wipro, ITC, Reliance and Bharti are also trading with losses.

Total market turnover (BSE+NSE) was only Rs 3,100 crore - indicating that money waiting on the sidelines, as predicted by all veteran market participants, could not participate today, and the rally may continue for some more sessions.

The market wide circuit breakers would be triggered by movement of either Sensex or the NSE S&P CNX Nifty whichever is breached earlier.
In case of a 10% movement of either of these indices, there would be a 1-hour market halt if the movement takes place before 1 p.m. In case the movement takes place at or after 1 p.m. but before 2.30 p.m. there will be a trading halt for 1½ hour. In case the movement takes place at or after 2.30 p.m. there will be no trading halt at the 10% level and the market will continue trading.

In case of a 15% movement of either index, there will be a 2-hour market halt if the movement takes place before 1 p.m. If the 15% trigger is reached on or after 1 p.m. but before 2 p.m., there will be a 1 hour halt. If the 15% trigger is reached on or after 2 p.m. the trading will halt for the remainder of the day.

In case of a 20% movement of the index, the trading will be halted for the remainder of the day.

Updated at 1155 hrs: Sensex opens 2100 pts higher after two hour Trading
halt. Circuit triggered again. Trading halted for the day.

Updated at 0955 hrs: Markets hit upper circuit within a minute of opening on Monday in reaction to UPA's phenomenal win at the general elections. All sectoral
indices surged with banking spearheading the rally. Trading has been halted for an hour.

The one-sided win for the UPA government (lead by 262 seats) in the 15th Lok Sabha election, which shrugged off the exit polls results drastically, brought great cheers for the markets in early trade. The benchmark indices locked at upper circuit. The BSE and NSE have decided that the trade will start at 11:55 am (i.e. after two-hour halt).

In the first 30 seconds of trade, the Sensex crossed the 13,000 mark and inched up towards 14,000 level. This was the first time since October 2008 that the Sensex surpassed the 13,000 mark and the Nifty crossed the 4000 level. Huge upsurge of 420 points or 11.4% in the SGX Nifty was suggesting the same trend.

What is a circuit breaker?

 

It is a system to curb excessive speculation in the stock market, applied by the stock exchange authorities, when the index spurts or plunges by more than a fixed limit. Trading is then suspended for some time to let the market cool down. If the market changes more than 10%, trading is halted for one hour, more than 15% trading is suspended for 2 hours. Although introduced in November 1992, it was used for the first time in the Bombay Stock Exchange on Tuesday, 9 March 1993 when the Sensex declined by more than 5% from the opening level, i.e. from 2451.20 to 2318.26. At that time, the circuit was 5%.

The Congress-led alliance is projected to win 260 seats, with rivals the BJP on 157. This confounded projections of a close election.

The communist parties, who had blocked reforms in insurance, pension funds and the selling off of state-owned companies, lost more than half their parliamentary seats.

Shares in some of India's largest companies also climbed. Reliance gained 37% and ICICI Bank jumped 25.3%, while carmaker Tata gained 40% and IT firm Infosys rose 9.8%.

The Sensex had climbed 26% already this year before the Congress Party victory was declared over the weekend.