The Metropolitan Stock Exchange of India
(MSEI) has put on hold its plan to extend trading hours, pending regulatory approval. However, the exchange, which has negligible volumes in the equities segment, hasn’t given up the plan. Abhijit Chakraborty, chief operating officer, MSEI, told Bloomberg
they would conduct a mock test with brokers
first, before extending the timing to 5 pm, which could happen “very soon”.
Following MSEI’s proposal, both the National Stock Exchange (NSE) and the BSE
deliberated an extension of trading hours.
However, they didn’t get a favourable broking community. Many brokers
believe the increase in costs could outweigh the benefits of having longer trading hours.
Also, it won’t result in higher volumes, they fear, as there is concentration in trading activity during the start and close of a session.
Currently, the Indian markets
are open from 9 am to 3.30 pm. An extension till 5 pm would see India
joining Singapore in having the longest trading hours
Singapore’s SGX is open from 9 am to 5 pm. The shortest trading hours
are in Shanghai and China. Taiwan, Thailand, Japan and Australia have also shorter trading hours
South Korea is open for 6.5 hours and markets
in Indonesia for seven hours.
The rules allow stock exchanges to set trading hours
in the equity and derivatives segments between 9 am and 5 pm. Till date, NSE
and BSE, where most trading volumes take place, haven’t availed of the option. Prior to 2009, the trading duration was only 5.5 hours, with markets
opening at 9.55 am.