BSE curtails filters of 15% `B` stocks

In what seems to be a damage control exercise, the Bombay Stock Exchange (BSE) curtailed the circuit breakers of nearly 15 per cent of the 1,900 actively traded counters in the ‘B’ group to 5 per cent from the existing 10 per cent for the past three days.

Although the stock exchange declined to comment on the matter terming it as a routine surveillance and supervision issue, market participants are of the view that the move by BSE, under the current circumstances, could be aimed at extending support to markets in case of a further steep fall and avoiding panic among investors.

A majority of ‘B’ group stocks fell in the range of 20 to 30 per cent last week as markets tested the August 2007 lows of 14,800 on the Sensex.

The exchange, however, had removed a majority of stocks from the trade-to-trade group originally attracting 5 per cent circuit last month and included them under ‘B’ group.

While this move by the exchange created some amount of temporary liquidity in the market, the stocks bore the burnt. On an average over 500 shares were hitting a lower circuit of 10-20 per cent daily.

Investors trading in the derivative segment, who used the small- and mid-cap stocks as margin or collateral have suffered a major loss as most of these stocks witnessed a erosion of over 60 per cent in their value after the benchmark index fell by over 6,000 points from its peak.