The earth’s magnetic field at the geomagnetic equator is horizontal. Hence, the needle of a dip circle will aligned according to the earth’s magnetic field, if suspended freely. But, in this case, movement in the horizontal direction is restricted but is free to move in vertical direction. Since there is no magnetic field in the vertical direction at the geomagnetic equator, the needle is restricted to move only in the vertical plane perpendicular to the magnetic meridian. Hence, the needle will assume any direction once it is released.