SEBI allows stock exchanges to go 9-5

Our Bureau

Mumbai, Oct. 23 The Securities and Exchange Board of India (SEBI) on Friday allowed stock exchanges to extend trading time by almost two-and-a-half hours, permitting them to operate between 9 a.m. and 5 p.m.

An NSE official said the extended trading would commence "very soon" on that exchange, although he would not commit to a specific date. The BSE too "welcomed" the move.

"It has been decided to permit the stock exchanges to set their trading hours subject to the condition that the trading hours are between 9 a.m. and 5 p.m. and the exchange has in place risk management system and infrastructure," a SEBI circular said. SEBI had earlier said that this was considered to allow Indian players to take advantage of the global information flows.

Currently the cash and equity derivatives market is open from 9:55 a.m. to 3:30 p.m. The currency derivatives market is open from 9:00 a.m. to 5:00 p.m., while the commodity derivatives market is open from 8:00 a.m. to 11:30 p.m.

Stock brokers unhappy

The stock broking community greeted the news rather bitterly. There was some consternation that the move might benefit only the larger players such as FIIs and the exchanges themselves, as volumes would increase with stretched trading hours.

"This extension was really not needed and the existing hours of trading were enough," said Mr Dharmesh Mehta, Head of Broking at Enam Securities, while some other brokers said that theoretically an increase in trading hours could mean higher volumes and profitability for brokers.

While this move does align the Indian market its global counterparts, FIIs, especially London-based ones, stand to benefit the most as they can hedge risks best as they have better global information flow, said brokers.

Retail investors too seemed unenthusiastic. "It doesn't really matter whether the markets run for five hours or seven hours as a retail investor needs to buy or sell at a certain level and for that the current trading hours were sufficient," said Ms Vanita Joshi, a regular retail investor