The Securities and Exchange Board of India (SEBI) has returned the National Stock Exchange’s (NSE) proposal to extend market timings in the derivatives segment due to a lack of consensus among the broking community.
The proposal suggested a phased plan to gradually extend trading hours for index F&O from 6 pm to 9 pm initially, aiming to help market participants respond to global news flow in the evening. The second phase would have seen trading extended until 11:30 pm, and in the final phase, cash market trading hours would be extended until 5 pm.
However, the broking community failed to reach a consensus on extending trading hours, citing concerns about additional costs and technological requirements. Ashishkumar Chauhan, MD & CEO of NSE, mentioned during an analyst conference call following NSE’s Q4 results that “As of now, the extended timeframe proposal is shelved.”
I think as is we are fine. Very happy to see that no change has been made to the timings. There is a life outside the market. It is important to note that.
Extending trading hours can have both benefits and challenges. While it can enhance accessibility and allow participants to respond to global developments, concerns about costs and technological readiness are valid. Finding a balance that accommodates market needs while addressing these concerns is essential for sustainable growth.
Sebi don’t have vision to see the grand picture. If our trading hours increases we would have more liquidity and our money won’t go outside cuz of forex
Well, I wish for no extension. You wish for an extension. But SEBI wish only matters which typically takes decisions based on wider consultation with players in the ecosystem.
I’m not keen on keeping markets open 24/7, ut if Sebi decides to do so, I have to adapt. I’ll either choose when to trade or use algorithms to manage my positions when I’m away.
Trading is important to me, but there’s more to life than just that.
Let’s begin by seeing whether extended trading hours are actually necessary or not. The Indian Stock Market, (NSE and BSE), predominantly features stocks and bonds while the commodity segment in those exchanges has minimal trading activity. Moreover, most companies operate locally, minimizing their exposure to global market fluctuations as such. Commodities, which are the primary assets affected by global trends, are already traded on MCX for approximately 14 hours, covering a significant portion of global time zones.
In terms of institutional players such as mutual funds and large financial institutions such as Banks, NBFCs, Insurance companies, etc. which have huge and significant exposure in the Indian market, there may be a requirement for extended hours to mitigate risks through hedging strategies (on the go). However, these entities typically manage their positions with careful risk management protocols well in place (they dont wait for any black swan event before hedging).
Hedge funds, on the other hand, may find extended trading hours beneficial as they frequently engage in “active trading” and intermittently adjust their hedging strategies (make and break) in response to market movements.
India is indeed an attractive destination for FPIs and SWFs who ofcouse wanted to get themselves brace against any overnight risk and based on this need we already has derivative contracts of NIFTY50 on the SGX Exchange. Recognizing the significant potential volume in SGX Nifty, a decision was made to relocate these contracts to India (why to let other exchange earn using our own contract ). These were moved to GIFT City, India’s own IFSC, offering the advantages of an offshore market within the domestic domain.
The exchanges (NSEIX and India INX) operating in GIFT City are open for 20 hours, accommodating all the time zones and giving all the eligible institutions enough space for trading and risk management (the volume in NSEIX derivative contracts are gaining good volume and OI). I had witnessed the activity in GIFT and could see the Brigade Tower (where NSEIX is located) - It never sleeps, people come in 3 shifts and the office is open almost 24 x 7! The city sleeps but brigade dosen’t! I might not be keen to have NSE or BSE likewise!
But current market dynamics would change and some of my current strategies may need changes.
). These were moved to GIFT City, India’s own IFSC, offering the advantages of an offshore market within the domestic domain.