MSEI temporarily puts off extension of trading hours

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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 in Asia. 

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 than India. 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. 

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