Longer trading hours? From next month!

India's two prime bourses, the National Stock Exchange and the Bombay Stock Exchange, are likely to extend the trading time by two-and-a-half hours from next month and a formal notification to this effect is expected shortly.

"Both the exchanges (BSE and NSE) have discussed the issue (extension of trade timings) and a formal notification is expected shortly," a senior exchange official said.

Last month, market regulator Securities and Exchange Board of India (Sebi) approved extension of the trading timings by up to two-and-a-half hours from 9 am to 5 pm. The current market hours stand from 9.55 am to 3.30 pm.

"Both the exchanges have already deliberated on the issue and they are likely to implement it after the expiry of the stock futures contract on November 26 or at the beginning of December contract," said an official privy to the development.

The new trading hours would now help integrate the Indian bourses with Singapore and other Asian markets in the morning hours and the European market in the evening hours.

In Singapore, which is around two-and-a-half hours ahead of India, trading sessions are held between 9 am and 12.30 pm and 2 pm and 5 pm (local time).

"Right now we are losing out to SGX Nifty (Indian Nifty traded in Singapore bourse) in terms of volume. By aligning market hours with global bourses, we can maximise amount of capital allocation to the Indian stocks," ICICI Securities executive director Anup Bagchi said.

Analysts feel the sooner the bourses implement the changes, the better it would be for them as they can increase the transaction fees.

"There is a stiff competition between the BSE, NSE and the new entrant MCX-SX. The exchanges need not wait till the expiry of the derivatives contract to implement the change as it would result in losing out on foreign funds interested in investing here," SMC Capitals equity head Jagannadham Thunuguntla said.

". . . 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 a.m. and 5 p.m.," Sebi had said in a statement.

The market regulator had further asked the bourses to reset their timings provided they have in place risk management system and infrastructure commensurate to the trading hours.

Bagchi added that brokers are sceptical that with the extension of the trading hours there would be a "certain cost increase for an uncertain upside in profits."