NSE Circuit Breakers on Union Budget 2026: Understanding Circuit Limits

Circuit breakers are basically the stock market’s pause button.

If the market suddenly moves too fast—either crashing or rallying sharply—the exchange temporarily stops trading. The idea is simple: give investors a cooling-off period, reduce panic buying/selling, and allow prices to stabilise with better information and liquidity.

When do market-wide circuit breakers apply?

These are market-wide halts, meaning they impact the whole market, not just one stock. They kick in when the key benchmark indices move beyond a certain limit compared to the previous day’s closing level—whichever benchmark hits the trigger first.

The three trigger levels are:

• 10 per cent move
• 15 per cent move
• 20 per cent move
   

These limits apply in both directions—a sharp rise can also trigger a halt, not just a fall.

What happens once a trigger is hit?

Trading is paused for a set time. The earlier in the day the trigger happens, the longer the pause, because there’s still a lot of trading left. If it happens late in the day, the pause is shorter—or in extreme cases, the market may remain shut for the rest of the day.

How does the market reopen?

If trading is allowed to resume the same day, the exchange restarts with a pre-open session first. This short window helps the market discover a fair opening price through a transparent matching process before normal trading resumes

One important detail

The actual “points” for 10 per cent, 15 per cent, and 20 per cent are not fixed. They change every day because they are calculated from the previous close.

In short: circuit breakers are meant to slow down extreme moves, protect investors from knee-jerk decisions, and keep markets orderly.