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What a day today (Fri 13th Mar 2020) turned out to be in the markets! A 10% fall shortly after opening triggered the lower circuit, led to a halt in trading in the NSE and there was a recovery! Sensex recovered 4% intraday! Nifty 3.81%. Here is why we witnessed something special today.
Earlier today we found that we are in the middle of the biggest Sensex Crash but it could be a healthy one for market homogenisation. This is the intraday Sensex movement from 11 to 13th Mar 2020. The opening, closing, highest and lowest prices are shown.
The reason for such a large variation is said to be short covering. This is when trader short a stock -borrow shares and sell it immediately in the hope they can re-buy at a lower price. This could drive down the market if prevalent. When (if) the price falls lower, they would re-purchase at a lower price for profit. This would drip up the price and is possibly why the market bounced back after trading was halted.
The last two days panned out like this
- 12-Mar-20
- open 34472.5
- high 34472.5
- low 32493.1
- close 32778.14
- 13-Mar-20
- open 31214.13
- high 34769.48
- low 29388.97
- close 34103.48
On 13th, The variation bet its low and opening or (low-open)/low is -5.8%
This is the 28th biggest variation.
| Date | l(ow-open)/low |
| 17-May-04 | -15.8% |
| 22-May-06 | -11.2% |
| 17-Apr-99 | -10.8% |
| 16-Mar-92 | -10.8% |
| 27-Oct-08 | -10.5% |
| 21-Jan-08 | -10.4% |
| 24-Oct-08 | -10.2% |
| 22-Jan-08 | -9.2% |
| 07-Jan-09 | -8.8% |
| 02-May-00 | -8.3% |
| 05-Nov-08 | -8.0% |
| 17-Oct-08 | -7.9% |
| 31-Mar-97 | -7.7% |
| 29-Feb-00 | -7.6% |
| 14-Sep-01 | -7.3% |
| 18-May-06 | -6.9% |
| 14-May-04 | -6.8% |
| 06-Jul-09 | -6.7% |
| 19-May-06 | -6.5% |
| 23-Feb-00 | -6.5% |
| 19-Apr-00 | -6.4% |
| 10-Mar-92 | -6.3% |
| 19-May-09 | -6.3% |
| 06-Apr-00 | -5.9% |
| 08-May-00 | -5.9% |
| 27-May-92 | -5.9% |
| 12-May-92 | -5.9% |
| 13-Mar-20 | -5.8% |
| 11-Nov-08 | -5.8% |
If that does not sound impressive, try this. The (close-low)/low is 16% on Mar 13th. This is the biggest such variation since 02-01-1991! Even during the 2008 crash, the biggest was 10.6% (27-10-2008) and during the Harshad Mehta Scam, it was 10.2% (16-03-1992).
Today the (high-low)/low = 18.3%. Only one instance was bigger, 18.8% on 17-05-2004.
Finally, the (low-previous close)/previous close = -10.3% today. This is the sixth biggest variation.
| Date | (Low -Prv close)/Prev Close |
| 17-May-04 | -16.6% |
| 21-Jan-08 | -10.8% |
| 22-Jan-08 | -12.9% |
| 24-Oct-08 | -12.3% |
| 27-Oct-08 | -11.5% |
| 13-Mar-20 | -10.3% |
We have just witnessed something special today! Once again, interesting times ahead.
About the Author
M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin
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The subject of the mail is: Why we witnessed something special in the market today! (Fri 13th Mar 2020)
This post has all the data (easily available all over, including comparisons). But there’s no reason why it happened what happened
You have misunderstood the title. Anyways for what it is worth, the “reason” has been updated.