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The exchange is proposing an evening session, possibly between 6 pm and 9 pm, when market participants can continue trading futures and options contracts after the regular session between 9:15 am and 3:30 pm is over, said one of them. The NSE might consider extending this session to 11:30 pm at a later stage, the person said.
The move to introduce longer trading hours is aimed at offering local traders an opportunity to react to global events sooner. Currently, Indian exchanges shut before US markets open.
Phased Introduction of Products Likely
Extended trade timings could also boost exchanges’ trading volumes as there are concerns over some large, sophisticated traders such as proprietary desks and hedge funds moving to rivals, including GIFT City, where trading is open round the clock.
The NSE has submitted its plan to the Securities and Exchange Board of India for approval, the persons said. The regulator has already drawn up rules that allow bourses to keep futures and options (F&O) trading open until 11:55 pm and shares until 5 pm.
The exchange has held discussions with top brokers and other market participants in the past few months for their feedback on evening session timings. It was also discussed at one of the NSE’s Trading Members Advisory Committee meetings.
An NSE spokesperson declined to comment. Sebi didn’t respond to queries.
The NSE is considering a phased introduction of products in the evening session. The bourse plans to start with index futures and options including Nifty and Bank Nifty, following which it could consider stock derivatives. The expiry days and timings for all products will remain unchanged.
While the NSE will treat the evening session as a separate trading session, the exchange is proposing to settle trades made during the session along with the next day’s regular session, said one of the persons cited above.
Objections Against Proposal
While the NSE is eager to introduce evening trading, the proposal faces resistance from some market participants, including some leading brokers. They say longer trading hours may not help in boosting volumes or turnover but would only end up driving up overall costs and employee discontent. The resistance is however not as strong as it used to be as the market is dominated by online brokers with automated systems.
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