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WHAT IS A CIRCUIT BREAKER?

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Factors like market speculations force stock prices or indices to enter into a circuit. Such a condition is beyond the control of regulatory authorities. Hence they use the circuit breaker to curb such market situations. Circuit breaker, simply put, is a set of rules formed and issued by SEBI in order to bring back normalcy in the stock markets in the event an index or stock enters into a circuit. SEBI has different circuit breakers for indices and for stocks.

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