In the fast-moving world of stock markets, crashes can come without warning—and April 7, 2025, was no exception. With Indian indices like BSE Sensex and Nifty 50 witnessing a steep drop of over 4% due to global tensions and a tariff war sparked by US President Donald Trump, many investors began asking: Can trading be stopped mid-session if markets fall too sharply? The answer lies in the circuit breaker rules in Indian stock market.
These rules are not just technical jargon—they play a crucial role in protecting investors and calming volatility in the market.
What Is a Circuit Breaker in the Share Market?
A circuit breaker is an automated mechanism that temporarily halts trading when there is a steep rise or fall in benchmark indices such as the BSE Sensex or the Nifty 50. Its primary goal is to avoid panic selling and provide the market with a “cooling-off” period.
This system is not unique to India. Global markets like Japan, Korea, and the United States also follow similar protocols. For instance, on the same day as the Indian crash, the Tokyo Stock Exchange temporarily halted trading when the Nikkei 225 plunged nearly 8%.
When Are Circuit Breakers Triggered in India?
India’s stock exchanges—NSE and BSE—follow a three-tiered circuit breaker structure based on percentage drops in major indices:
1. 10% Fall:
- Before 1:00 PM: Trading halts for 45 minutes.
- Between 1:00 PM and 2:30 PM: Halt for 15 minutes.
- After 2:30 PM: Trading may be suspended for the entire day.
2. 15% Fall:
- Before 1:00 PM: Market stops for 1 hour 45 minutes.
- Between 1:00 PM and 2:00 PM: Halt for 45 minutes.
- After 2:00 PM: Trading shuts down for the rest of the day.
3. 20% Fall:
- No matter what time it happens, trading is suspended for the entire day.
Note: These rules apply equally to both NSE and BSE. After any halt, trading resumes through a 15-minute pre-open session to allow for price discovery.
What If The Market Rises Sharply?
Interestingly, the circuit breaker mechanism can also apply to sharp market upswings, though the primary focus remains on preventing crashes and panic-driven selling.
Why This Matters to You as an Investor
Understanding these circuit breaker levels is essential for anyone actively investing or trading in the stock market. It helps you prepare for potential halts, reduce risk, and make rational decisions in a volatile environment.
Also, remember that triggering of a circuit breaker doesn’t mean the end of the world—it’s a built-in safety net that aims to protect your investments.
Final Thoughts & Market Outlook
With international markets reacting strongly to policy changes and geopolitical tensions, Indian investors must stay alert and informed. The circuit breaker mechanism is your friend during market turbulence, not your enemy.
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