MSEI Extends Trading Hours Till 5 pm. Will BSE and NSE Follow The Lead?

by Vinaya HS on July 29, 2017

in Finance

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The Metropolitan Stock Exchange of India has decided to extend the closing time of trading hours. Earlier the closing time of the trading hours on its equity capital market segment was 3:30 pm. After the announcement of the extension of the trading hours by MSEI, the trading will be open till 5 pm. The brokers believe that this extension of one and a half hours of trading hours is given to re-launch MSEI in the market.

Until now, Bombay Stock Exchange and National Stock Exchange of India, who are the competitors of MSEI, have not declared any change in the trading hour timings. While NSE has kept mum on this matter and has refused to make any comment, a BSE spokesperson has said that only after studying the circular, will they make a decision as to whether to follow the MSEI and extend their closing timings too. However, it is believed that these two will have to follow MSEI and they will finally end up extending the trading hours, sooner or later.

As per the Indian stock market news, National Stock Exchange had a discussion with the brokers about the extension of the trading hours, and they have not responded in the favor. The stock exchange believes that if the brokers are fine with the idea, then NSE does not mind changing the closing timing.

The capital market regulator, SEBI had already offered the stock exchanges to extend the trading hours till 5 pm back in 2009, to which the exchanges had not responded. Though, BSE had then announced that it will open the trading at 9.45 am in the morning and will keep the evening hours the same. NSE was quick to respond to this move from BSE and declared to start their trading hours 55 minutes earlier. This led to a consensus between the two stock markets when both of them made a decision to open their respective stock exchanges at 9 am. But the closing hours was kept at 3:30 pm only. They both had decided not to extend the closing hours beyond 3.30 pm as a result of confrontation from the brokers due to the cost implications.

Out of MSEI, BSE, and NSE, MSEI is the smallest player while NSE has the major chunk of market share with a share of 85% in the cash segment and a whopping 99% share in the derivatives segment. The stock market brokers believe that MSEI is aiming to revamp the exchange trading in a hope to increase their market share and volume and hence they wish to extend the trading hours. But, the experts also hold the opinion that if the bigger players follow the suit and they also extend their trading timings, it will not help MSEI. Moreover, this move will result in more cost of the manpower and the increase in revenue is also not likely. Even if there is a slight benefit, the cost will nullify the impact, the brokers said.

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