That is an interesting question. To answer your query, both are the correct picture. In the early trades on 13 March, the Nifty hit the lower circuit for two reasons. Firstly, there was the Dow and the European indices correcting by 10-12% on the previous evening. That was an overhang on the market. Secondly, the markets have been worried by the rapid spread of the Coronavirus in India and in other parts of the world. Also some positions were stuck in the long side and these positions had to be forcibly closed leading to a sharp.

The subsequent bounce by over 1000 points is also a reality. Clearly, the correction was overdone and there were some interest buyers at lower levels. Secondly, traders who had gone short also rushed to cover their shorts and that also pulled the markets up. It is also likely that some largely domestic funds would have supported the markets to avoid additional damage to equity portfolios. Intervention of this kind is legitimate and also important to ensure that the market integrity is protected.