WHAT IS CIRCUIT BREAKER?
- An automatic device for stopping the flow of current in an electric circuit as a safety measure.
WHAT IS CIRCUIT BREAKER IN STOCK MARKET?
- Circuit breakers are pre-defined values in percentage terms, which trigger an automatic check when there is a runaway move in stock market on either direction.
- Circuit breakers are employed for both stocks and indices.
2 things that happen during Circuit Breaker:-
- Halting of trade in a security or index for a certain period.
- Halting of trade in a security or index for the entire trading day.
KEY FACTORS BEHIND THE FRESH MARKET SELLOFF
- India under lockdown,companies announce shutdown.
- Delays in $1 trillion US stimulus.
- Rupee hits 76 a dollar level, FII selling intensify.
- India has reached a crucial phase where it can either go China or Italy’s way.