Understanding Market Halts

Posted On 23 Mar 2020
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Halting trading of the market due to an extreme decline in a particular index during the day, as a result of the share prices falling rapidly, is a measure that is implemented by stock markets around the world. Trading Halts triggered by circuit breakers, were a common occurrence during the recent weeks and continue to be so in stock markets globally, as the investment community responds to global economic implications of the COVID-19 pandemic. According to the World Federation of Exchanges, market volatility surrounding the COVID-19 pandemic has reached levels comparable with the Global Financial Crisis of 2008, with one-day losses not seen since 1987.

A similar trend was visible on the Colombo Stock Exchange (CSE) as well, with a 30-minute Market Halt being imposed on 10th, 12th, 13th and 20th March 2020 due to the S&P SL 20 index declining over 5% from the previous day’s closing levels.

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