In a highly volatile session, equity indices on Friday erased most of their losses in afternoon trade as markets rebounded from record lows. The benchmark BSE sensex and the broader NSE Nifty plunged over 10 per cent, hitting their lower circuit limits, within the first 15 minutes of opening of the session. The steep dive in the markets in opening session eroded more than Rs 12 lakh crore of investors’ wealth. Mild recovery was seen in other Asian bourses too. From Wall Street to Asia, the recent sell-off in global stock markets has triggered trading halts in multiple stock exchanges — an occurrence that could become increasingly common as investors fear the impact of the coronavirus outbreak. In the U.S., trading was temporarily stopped twice this week after the S&P 500 Index fell 7% — triggering the first threshold for a “circuit breaker,” aimed at preventing markets from wild swings. In Asia, circuit breakers were also triggered in many exchanges including India, Japan, South Korea, Indonesia, Thailand and the Philippines this week. Circuit breakers are measures implemented by exchanges when they consider price movements to be overly volatile. On this edition of The Big Picture we analyse the volatility in stock markets and impact on economy.
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