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MARKET ON RAMPAGE


The stock markets broke all records on 18th May, 2009. Driven by the pro-UPA mandate in the polls and rallied by an unprecedented 2,111-points in just a minute of trading, forcing authorities to suspend business for the day. Eager buyers were left gaping and the day was over even before they could formulate their thoughts of a buy order in a frenzied market that witnessed an appreciation of Rs 6.5 lakh crore in market capitalisation as the BSE-Sensex surged to 14,284.21 points. Trading was first halted at 0955 hrs for two hours and subsequently for the day within 30 seconds of commencement each time because of buying frenzy, a sentiment that was in sharp contrast to a panic selling-driven halt in trading around the same time in 2004 days before UPA came to office.The story was no different at the National Stock Exchange, where a minute of trading in two sessions saw prices breaching all records of a single day jump, although transactions were limited. NSE's Nifty closed the day higher by 651.5 points at 4,325.15 points.
Circuit Braker...How it applies?
Circuit breaker is a mechanism, wherein trading is automatically halted for one hour if the benchmark indices rise or fall by 10 per cent of the closing level of the last quarter. A movement of 20 per cent halts the trading for the entire day.
Also the Sensex today soared by 2,111 points to close at 14,284.21 points. It had surged 1,760 points at 13,963, hitting the upper circuit following which trading was halted for two hours. After the trading was resumed, the Sensex soared 806 points at 14,284.21 triggering a halt for the day. On March 31, 2009, the last trading day of the quarter, Sensex closed at 9,708.50 points. The absolute points of Sensex variation which would trigger market wide circuit breaker for any day in the quarter between April 1 and June 30 would be 975 points for first 10 per cent trigger point, 1,450 points for the second 15 per cent trigger point and 1,950 points for the final 20 per cent trigger.
Similarly for the Nifty, the three trigger points in the current quarter would be 300 points, 440 points and 600 points -- based on a closing level of 3,020.95 points on March 31. In case of a 10 per cent movement of either of these indices, there would be a one hour market halt if the movement takes place before 1 pm.
In case of a 15 per cent movement of either index, there will be a two hour market halt if the movement takes place before 1 pm. If the 15 per cent trigger is reached on or after 1 pm but before 2 pm, there will be a one hour halt. If the 15 per cent trigger is reached on or after 2 pm the trading will halt for the remainder of the day. In case of a 20 per cent movement of the index, the trading will be halted for the remainder of the day.
Rs 10,000 cr every second
Turning stock market into a money- making machine, the investors added well in excess of Rs 10,000 crore in every second of trade today — a frenzy they must have wished continued beyond just a minute. However, the hopes are still not dashed completely as Dalal Street is pinning on another spectacular performance tomorrow with an eye on 15,000-points milestone for Sensex, even if it does not match today's historic gain of 2,111 points. During 60 seconds of trade today — first for 30 seconds at the opening and then another 30 seconds after trade resumed at 1155 hours — investors' wealth measured in terms of total market capitalisation of all the listed companies grew by about Rs 6,50,000 crore. This is the biggest ever gain in the history of stock market, not only in India, but possibly in the entire world.
This sharp surge, the best ever post-polls performance of stock market in India, comes in sharp contrast to a huge loss suffered after the last general elections in 2004. Election results had been announced during trading hours on May 13, 2004 and Sensex had ended up 0.8 per cent after highly volatile trade, but lost over 300 points the next day. In following trading session on May 17, 2004 Sensex plunged 11.1 per cent, its biggest drop in 12 years. The Sensex had lost over 894 points in the two days after the election results were out in May 2004.
Meanwhile, today the total investors' wealth, measured in terms of combined market-cap of all the listed companies, has increased by over Rs 6,56,477 crore in a minute — in the first 30 seconds and then after resumption trading in the afternoon — to Rs 44,63,420.97 crore.
The 30-share Bombay Stock Exchange Sensex zoomed 1,305.97 points at 13,479.39, hitting the upper circuit with seconds of opening of trade, following which trading was halted for two hours. After trading was resumed the Sensex soared 806 points at 14,284.21 following which trading was halted for the day.
Further, the 30 Sensex companies, which account for over 47 per cent of the total market-cap of all the companies, saw their combined market valuation rise by over Rs 3.16 lakh crore today.

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