The Hindu Business Line : Record 471 stocks hit upper circuit on BSE

EVEN as the Sensex moved close to the 4,000 level, there seems to be aggressive buying across-the-board with every fifth stock traded on the BSE today hitting the upper circuit filter.

In circuit filter, a stock cannot rise or fall beyond a particular percentage level in a single trading day. If a stock price falls or rises beyond a certain limit, further trading in the stock cannot take place on the day. This has been introduced to avoid any excessive buying or selling.

Today, 471 stocks were locked in the upper circuit on the BSE, out of the total traded stocks of 2,201 i.e., 21.39 per cent or every fifth stock was on upper circuit. Compared to this, just 33 stocks were in the lower circuit.

Brokers and analysts said this is the highest number of stocks that have hit the upper circuit in a single trading session, since the introduction of circuit filters in 1996-97 in the country.

Currently, BSE has upper and lower circuit limit of 2 per cent, 5 per cent, 10 per cent and 20 per cent for stock depending on their trading patterns.

A closer look at the break-up of the stock in the circuit filter shows that 2 stocks were on the upper circuit compared to 199 stocks traded in the A group. In B1 category, 95 stocks were in upper circuit out of the 764 stocks traded.

The maximum number of stocks on the upper circuit were 347 in B-2 category, out of 1,163 shares traded, and in Z category, 27 shares were in upper circuit out of 66 traded.

Mr Arun Kejriwal of KRIS Research said: "a large number of stocks in upper circuit is sending a cautionary signal to the market." He said stock in the B-2 and Z category of BSE have moved faster and far ahead of the frontline stocks This was not good for market.

Another broker said there were companies, which were not operational but their stocks were also on the upper circuit and this was causing concern. When this kind of situation arose, it was considered that the stocks were at their peak levels.

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