MUMBAI: Indian investors will be able to trade for longer hours in the stock market as exchanges are discussing plans to extend trading hours up to 5 pm. The move, which has been discussed multiple times in the past few years, is aimed to align Indian equity markets, as far as possible, with those of the international markets and to enable domestic investors to take advantage of news flow from the global markets.
Currently, after a pre-opening session from 9 am to 9:15 am, active trading on NSE and BSE starts at 9:15 am and ends at 3:30 pm. For the cash segment on NSE and BSE and the NSE F&O segment, the trading hours are 9:15 am to 3:30 pm.
Exchanges have started approaching their members to seek their feedback on extending trading hours. “The NSE has already started reaching out to its members and other stakeholders to take their feedback on increasing trading hours, but the focus is on extending trading hours for equity derivative contracts,” said a senior official of NSE.
“The successful transition to T+1 settlement has boosted the sentiments in the stock market and has encouraged market infrastructure institutions (MIIs) to take more initiatives to empower investors and strengthen equity market infrastructure,” he added. Exchanges have not yet decided on the timeline to implement this plan but they want to implement this plan in a gradual manner.
Bourses and other stakeholders believe India has lost a good chunk of its trading volumes to other global bourses because of the wide gap between trading hours between global and local equity markets. Market participants also expect an increase in trading volumes due to increased timings. Experts say quick and effective assimilation of information will make markets more efficient in terms of better price discovery, reduction in volatility and impact cost.
“Extension of market hours would enable market participants to execute trading strategies in Indian markets based on information flowing in, which otherwise would have been executed outside India. With extended timings, Indian equity markets will be aligned more with global markets which will help domestic investors to react quickly to global news and events,” Kamlesh Shah, President, the Association of National Exchanges Members of India (ANMI) told this newspaper.