Monday, May 18, 2009

BSE Raging Bulls Make History

. Monday, May 18, 2009

By stockOzone team

The trading on the BSE and NSE has been halted for the full day as the markets hit the 20 per cent circuit breaker after they reopened at 11:55 am. The Sensex zoomed 2099 points to 14,272. The Nifty touched 4,308, up 17.3 per cent. This is for the first time that trading has been halted for the full day on the BSE and the NSE.

The markets had hit the upper circuit within minutes after opening and then trade had been halted for 2 hours till 11:55 am.

On the sectoral indices front, the BSE realty index jumped 15.8 per cent and the BSE bankex rose 13.6 per cent. The BSE capital goods index and the BSE metal index surged over 12.3 per cent each. The oil & gas index on the BSE advanced 11.9 per cent.

Raamdeo Agrawal, director at Motilal Oswal Securities, said that Indian markets are poised to move up sharply and it is time to get back to investing aggressively into markets.

Among the Sensex stocks, BHEL rose 32.7 per cent to Rs 2,266 and the L&T advanced 29.5 per cent to Rs 1,280. DLF and ICICI Banks also jumped over 25 per cent each. Reliance Industries also surged 22.8 per cent to Rs 2,393.

Shankar Sharma, director at First Global, said it is important to book profits after the sharp rally.

The other stocks that saw whopping gains were IBREL and IVRCL Infra. The counters jumped more than 38 per cent each.

In the Asian markets, Japan’s Nikkei was down 2.4 per cent and South Korea’s Kospi fell 0.3 per cent. However, Hong Kong’s Hang Seng and China’s Shanghai Composite were in the positive zone.

The BSE implements on a quarterly basis the index based market wide circuit breaker system, which is applicable at three stages of the index movement either way at 10 per cent, 15 per cent and 20 per cent. This circuit breaker brings about a coordinated trading halt in all equity and equity derivative markets nationwide.

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.

The percentages are calculated on the closing index value of the quarter. These percentages are translated into absolute points of index variations (rounded off to the nearest 25 points in case of Sensex). At the end of each quarter, these absolute points of index variations are revised and made applicable for the next quarter.

On March 31, 2009, the last trading day of the quarter, Sensex closed at 9708.50 points. The absolute points of Sensex variation (over the previous day's closing Sensex) which would trigger market wide circuit breaker for any day in the quarter between 1st April 2009 and 30th June 2009 would be as under

Disclosure: Author does not own any of the stocks discussed here.





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