Fundamental Glossary / Indian Stock Market-Specific Fundamentals
Circuit Limits
Price bands and market-wide halts that stop trading from moving without a pause.
Formula
Index-wide circuit breakers apply when the Sensex or the Nifty 50 moves 10%, 15%, or 20%. NSE's published schedule halts the market for a period that depends on the size of the move and the time of day. A 20% move halts trading for the rest of the day. Individual stocks also have price bands, often 5%, 10%, or 20%, and derivative stocks use a dynamic band.
What it means
Circuit limits are market-structure rules, not fundamental value. They slow a panic or a squeeze. They do not make the business worth more or less.
A stock locked at a lower circuit cannot be sold at a better price until the band opens or the next session. That is a liquidity fact for anyone who owns it.
How to read it
Repeated lower circuits after a disclosure mean the market is repricing faster than the band allows. The fundamental work is the disclosure, not the circuit itself.
What to watch
Index halts and stock price bands are different systems. A stock can hit its band on a quiet index day. Halt lengths have been revised over the years. The exchange's current circular is the operational source.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.