Upper circuits of stocks refer to the upper limit beyond which its price can not go on the current trading day. Upper circuits are typically calculated as a percentage of the previous closing price. For a stock to hit the upper circuit, the current investors must not be willing to sell even at the upper circuit price, while various probable investors want to invest at that price.
Upper circuits also exist for stock indices and are calculated as percentages of the previous closing value. For stock indices, circuit limits are placed at various levels, which, when reached, lead to the halting of trading activity for a specified period.
