Market regulator SEBI on Friday opened gates for longer trading hours for stock exchanges, allowing the bourses to extend market hours by around two-and-a-half hours between 9 am and 5 pm.
The current market hours stand from 9.55 am to 3.30 pm.
" ... it has been decided to permit the stock exchanges to set their trading hours (in the cash and derivatives segments) subject to the condition that the trading hours are between 9 am and 5 pm," SEBI said.
The Securities and Exchange Board of India further asked the bourses to reset their timings provided they have in place risk management system and infrastructure commensurate to the trading hours.
It is expected the bourses would utilise the full window between 9 am and 5 pm, experts said.
"All stock exchanges are likely to go for the maximum possible trading hours as they have been demanding for trading hours to be extended to 9 am to 9 pm," SMC Capitals Equity Head Jagannadham Thunuguntla said.
It would help brokers and trading community to transact for longer duration and would integrate the domestic market with the international market, Thunuguntla said.
With market regulator SEBI now open for longer trading hours, it is now up to the bourses to take a business call and decide on the duration and when to reset their trade timings.
"There is a serious competition going on between Bombay Stock Exchange and National Stock Exchange, and then there is the new competitor MCX-SX that is coming. I will be surprised if any bourse not utilises the full timing," Thunuguntla said.
The new trading hours would now help integrate the Indian market with Singapore and other Asian markets in the morning hours, and the European market in the evening hours, he said.
"Some trades that had shifted to SGX Nifty (Indian Nifty traded in Singapore Stock Exchange) can now be brought back to the country," he said.
The new arrangement would also help in taking trading position based on information flow from different geographies immediately instead of waiting for the next trading session the following day, he added.
