After the report of American short selling company Hindenburg, the decline in Adanigroup’s stock is not taking its name. In Tuesday’s trading session, many shares of Adanigroup are trading in the red mark. Some stocks have even hit the lower circuit. In fact, the selling in Adani Group shares continues for the fourth consecutive day today. The negative report on the Group shares by forensic financial research firm Hindenburg has further dampened the sentiment. In view of this, the domestic stock exchanges BSE and NSE have reduced the lower circuit limit of Adani Total Gas, Adani Green Energy and Adani Transmission. In these, this limit has been reduced from 20 per cent to 10 per cent. That is, now the lower circuit will be installed only after 10 percent fall in them. The stock exchange has taken this decision on the shares of Gautam Adani to save investors from further losses.
Circuit limit for today
After revising the circuit filter in Adani Transmission, today the upper circuit limit will be Rs 1881 and the lower circuit limit will be Rs 1539 on BSE. Adani Transmission closed at Rs 1693, down 15 per cent on Monday.
After revising the circuit filter in Adani Green Energy, today Upper Circuit Limit will be Rs.1306.45 and Lower Circuit Limit will be Rs.1069 on BSE. Adani Green Energy’s stock had closed at Rs 1188 on Monday.
After revising circuit filter in Adani Total Gas today upper circuit limit will be Rs 2582 and lower circuit limit will be Rs 2113 on BSE. The stock of Adani Total Gas had closed at Rs 2348 on Monday.
What is circuit filter
This is the price limit created by the market regulator. This determines how much a stock can go up or down. Whenever a stock rises or falls beyond the specified limit, trading in that stock stops. For example, if the price of a stock is Rs.100 and the circuit filter in it is 10%, then trading in that stock is stopped as soon as it reaches the price of Rs.110. Similarly, trading stops at the lower limit as well. In these, the filter is applied on the rise or fall of 10 per cent, 15 per cent and 20 per cent. After this there is a cooling off period. This also happens for the stock exchange. The circuit limit determines how much the indices like Nifty and Sensex of NSE or BSE can go up and down in a day.
Purpose of circuit filter
The purpose of circuit filters is specifically to prevent large fluctuations in the market. It is most needed at the time of volatility. The circuit filter gives market participants time to recover. This prevents a big rise or a big fall in a stock or exchange. It can be understood in such a way that if there is any big negative news about a particular company during the trading hours, then the stock of that company can fall drastically, but due to the circuit filter, it can become weak within the fixed limit.
10 percent circuit
If a 10 per cent rise or fall occurs before 1 pm, trading in the market is halted for an hour. Trading resumes after 45 minutes after a 15-minute pre-open session. At the same time, if this happens after 1 o’clock, then the business stops for 30 minutes. After 2.30 pm, trading continues when 10 per cent circuit is installed.
15 percent circuit
If the 15 per cent circuit in the index occurs before 1 pm, trading in the market is halted for 2 hours. If there is a 15 per cent drop after 1 pm, trading stops for an hour, but after 2.30 pm, trading continues if there is a 15 per cent circuit.
20 percent circuit
If there is a circuit of 20 percent in Sensex or Nifty, then it is not started on that day. The market closes for that day and trading resumes the very next day.