Circuit breaker
Also called: market-wide circuit breaker
A pause in trading across the whole market when the Nifty 50 or Sensex moves 10, 15 or 20 percent in a day.
India’s market-wide circuit breakers work in three stages. A 10 percent move in either index, up or down, halts trading on every exchange: for 45 minutes if it happens before 1 pm, for a shorter spell or not at all later in the day. At 15 percent the halt is longer, and at 20 percent trading stops for the rest of the day. Each halt ends with a short pre-open session to restart prices.
Single shares have their own limits, called price bands or circuits. A share that hits its upper or lower circuit cannot trade beyond that price for the rest of the day.
Example
On 23 March 2020 the index fell 10 percent within the first hour, trading halted for 45 minutes, and the Sensex went on to close 13 percent lower.
Watch out
A halt is a pause, not a forecast. Ten days earlier, on 13 March 2020, trading halted after a 10 percent fall and the Sensex still closed the day higher.
Learn it properly in
Chapter 1.2: Sensex and Nifty: what the two numbers on the news actually measure