The trading was halted for half an hour between 1pm and 2pm after Nepse index rose more than four percent. However, gains made in the second trading hour could not last for long and the market closed at 347.91 points - up 3.45 percent.[break]
Circuit breakers are rolled out to protect the market from negative effects of sudden upward or downward movement in share prices. This breaker generally sets upper and lower limits in movement of index or share price for specific timeframes.
For instance, it is clamped for 15 minutes if the index rises or falls by over 3 percent from the closing price of the previous day in the first trading hour of the day from 12 noon to 1 pm. It is then put into effect for half an hour if the market moves up or falls by over four percent in the second trading hour from 1pm to 2pm.
But trading is halted for the entire day if the index falls or rises by over five percent in the final trading hour of the day from 2pm to 3pm.
Related story
Daily Commentary: Nepse triggers positive circuit breaker for a...
