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BSE clarifies on price band circular; midcaps, small caps trim losses

BSE clarifies on price band circular; midcaps, small caps trim losses

BSE clarifies on price band circular; midcaps, small caps trim losses
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By Santosh Nair  Aug 11, 2021 3:06:48 PM IST (Updated)

The BSE has clarified the circular is only applicable to stocks with a price of Rs 10 and more, market capitalization less than Rs 1000 crore. On Monday, the BSE had issued a circular specifying weekly, monthly and quarterly limits for stocks subject to pre-specified gains over the last 6 months, one year, two years and three years.

The Bombay Stock Exchange (BSE) has clarified the price band circular issued on August 9 was applicable to securities listed exclusively on the BSE and falling under groups X, XT, Z, ZP, ZY, Y. The bourse said the framework would be applicable for securities with a price of Rs 10 and more, market capitalization less than Rs 1000 crore. The circular will be effective from August 23.

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Mid and small-cap stocks, that had taken a beating early in the day have managed to trim much of their intra-day losses. In a rising market, exchanges typically put price limits to curb excessive speculation. This usually sours sentiment for these stocks and results in a sell-off.
On Monday, the BSE had issued a circular specifying weekly, monthly and quarterly limits for stocks subject to pre-specified gains over the last 6 months, one year, two years and three years.
Stocks that had appreciated more than 6 times over the last six months, 12 times over the last 12 months, 20 times in two years and 30 times in three years would be subject to the limits.
The add-on price bands will be in addition to the applicable daily price bands of these securities, the BSE said.
Both S&P BSE midcap and smallcap indexes recovered from day's lows to trade higher but they were 150 and 343 points down, respectively.
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