The Hindu Business Line : 1,323 stocks hit lower circuit

Chennai, Jan. 21 The upheaval at the bourses had a major impact on small- & mid-cap stocks. Probably the lone indicator that was positive so far paints a grim picture now, with 1,323 stocks hitting lower circuit filter against just 51 stocks that hit the upper circuit on the BSE on Monday. If a stock hits upper circuit filter, it means there are no sellers and only buyers; vice-versa if it hits a lower circuit filter.

Till now, when small- & mid-cap stocks were in vogue, circuit summary and advance/decline ratio painted rosy picture for the market. However, both these indicators turned weak since the first weak of January.

Today’s sharp fall changed the circuit filter scenario altogether. Every second stock that was traded on the BSE saw its share price ending at lower circuit filter. This, according to observers, indicates that the selling, which was largely confined to large-cap stocks in the recent past, is slowly percolating to mid- and small-cap stocks too.

As many as 538 stocks from the T-group hit lower circuit, while the B2-group accounted for 325, followed by B1-group with 151 stocks. Even A-group accounted for as many as 10 stocks.

The total number of traded stocks on the BSE was 2,891. Of this, only 5 per cent or 139 stocks ended in green while 2,657 stocks closed in the red. The BSE Sensex and BSE-100 saw all their components ending in the red, while BSE-200 and BSE-500 saw 99 per cent of stocks ending in the red. Only 2 stocks in BSE-200 and 5 stocks from BSE-500 ended in the green.

Majority of mid- and small-cap stocks (which are not part of derivative trading) attract circuit filter.

The exchanges apply daily circuit filters of 20, 10, 5 or 2 per cent depending on the volatility and speculative activity in the stock. However, no circuit filters are applicable to those stocks on which derivative products are available.

“The imposition of circuit filters on scrips ensures that the price of the scrip cannot move upward or downward beyond the limit set for a day,” according to the BSE Web site.

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