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How To Trade When Nifty Hit's Lower Circuit

What is the Lower circuit limit in Nse Nifty or BSE Sensex ?

A Lower circuit limit for Bse Sensex and Nse Nifty has been prepared as per the Guidelines of SEBI. The Circuit limit will apply when Exchange falls by for 10%, 15% or 20% during any time of the day. This Rules came in to effect on from July 02, 2001, it was updated again by SEBI Circular on September 03, 2013.

When Nse Nifty and Bse Sensex Hit the Lower circuit?

First A1 Intraday tips Investment Advisory Team has tried to explain the Lower Circuit and what will happen when Nse Nifty or Bse Sensex hit's the lower circuit. As per the Sebi ( Security Exchange Board of India ) Guide Lines, Sebi has specified that circuit breaker system applies at 3 stages of the index movement, either way viz. at 10%, 15% and 20%. Nse as well as BSE Exchange shall compute the Index circuit breaker limits on daily basis based on the previous day's closing price of the respective index rounded off to the nearest tick size.

Nse Market hit Lower Circuit on 13th March 2020

Nifty Circuit Rules in India NSE


Nse Circuit Breaking at 10%

If the BSE Sensex or NSE Nifty go down 10 % before 1 PM, Nse will stop trading across-the-board for 45 minutes, If BSE Sensex or NSE Nifty go down 10 % between 1 pm and 2:30 pm, the trading will be stop for 15 minutes while after 2:30 pm, there will be no halt.


Nse Circuit Breaking at 15%:

If the BSE Sensex or NSE Nifty go down 15 % before 1 PM, Nse will stop trading across-the-board for 1 hour & 45 minutes, If BSE Sensex or NSE Nifty go down 15 % between 1 pm and 2:30 pm, the trading will be stop for 15 minutes while if 15% circuit take place after 2:30 pm, Market will be shut for trading for the remainder of the day i.e till 03:30 pm when market closes for trading.


Nse Circuit Breaking at 20%

If the BSE Sensex or NSE Nifty go down 20% at at given time during the day, Nse Market as well as BSE will be shut for trading for the remainder of the day i.e till 03:30 pm when market closes for trading


When did Nse Nifty and Bse Sensex hit lower circuit ?

The Nse Nifty and Bse stock exchange hit the lower circuit on “Friday the 13th march 2020”, as fears of Corona Virus / Covid 2019. Nifty has hit lower circuit after a gap of 12 years, it had hit the lower circuit on "January 21, 2008". The Nse investors had panicked following weak global cues amid fears of the US recession


Guidelines for Traders / Investor to trade in lower circuit ?

  • Small traders are requested stay away from market.
  • Professional traders and Long term traders can buy only blue chip shares that too on SIP basis, keep on buying in small quantities. Keep Cash ready to buy good companies/ valued stock at low prices.
  • Intraday traders should trade in small qty.
  • Avoid to trade in F&O segment ( Future and option segment )
  • Traders should buy only on delivery base for short term and Long term.
  • When nifty hits lower circuit a investor is advised to buy shares from Nifty50 Companies or fundamentally good stocks after through research. This will certainly give them good profits after a gap of 6 months to 12 Months.
  • Please do not buy penny stock which fall 50% to 70% from its high.

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