Mark Twain divided people into two types: those who have seen the famous Indian monument, Taj Mahal and others who have not. The same can be applied to the Indian stock market. There are two kinds of investors, those who invest in the Indian stock market and those who do not.
If you set an alarm for 9 a.m. put it on snooze mode until 9:15 am, you are a stock market trader! Also, checking the market trends on Dow Jones (USA) before going to bed and Singapore Nifty in the morning are activities performed by people who invest in stocks.
The Indian stock market is represented by the Bombay Stock Exchange's (BSE), Sensitive Index (Sensex) and the National Stock Exchange's (NSE) S&P CNX Nifty (Nifty). The Sensex is the forerunner of the Indian stock market. It is the older and more widely used index.
However, since the NSE has grown in popularity due to its more transparent trading process and cheaper trading costs, Nifty has become a prominent and broad-based market index.
According to SEBI's Annual Report for 2015-2016, the BSE and NSE account for more than 95 percent of all business performed on all Indian stock exchanges. The National Stock Exchange (NSE) operates from 9:15 am to 3:30 pm.
Between 9:00 am to 9:15 am is pre-opening that witnesses adjustments in the prices of stocks such as upper or lower circuits etc. The market is open on weekdays, from Monday to Friday. It is closed on public holidays.
This article will explore stock market timings, NSE holidays, muhurat trading( auspicious time trading), NSE guidelines and other related concepts in detail.
Being aware of the NSE holidays will help investors plan their investment and trading strategies better. This article also explores the various guidelines of the NSE.
Overview of National Stock Exchange (NSE)
The Stocks Contract (Regulation) Act of 1956 defines a 'Stock Exchange' as a group of people, whether incorporated or not, whose goal is to aid, regulate, or control the business of buying, selling, or dealing in securities.
A regional stock exchange, whose area of operation/jurisdiction is established at the time of its registration, or a national stock exchange, which has been authorised to conduct countrywide trading since its creation, are examples of stock exchanges.
The National Stock Exchange (NSE) was established as a national stock exchange. Companies and investors can meet in a transparent and controlled environment provided by the BSE/NSE.
There are around 5000 firms listed on the BSE, while the NSE has 1800. A national stock exchange exists in the majority of industrialised countries. Share markets such as the London Stock Exchange, NASDAQ, Nyse Stock Exchange, and Tokyo Stock Exchange may be familiar.
These organisations serve the same purpose: to provide capital raising and trading services. Major financial institutions founded The National Stock Exchange (NSE) to create a modern, completely automated screen-based trading system with national reach.
The Exchange has achieved unprecedented levels of openness, speed and efficiency, security, and market integrity. In terms of systems, processes, and procedures, it has established facilities that serve as a model for the securities business.
Bombay Stock Exchange (BSE) is also a trading system operating out of Bombay, India. Established in 1875, it is the oldest stock exchange in Asia.
The NSE has been a catalyst in modernising the Indian stocks market in terms of microstructure, market behaviours, and trading volumes. These are some of the innovations in products and services that have occurred in recent years:
- Demutualisation of stock exchange governance
- Screen-based trading
- Compression of settlement cycles
- Dematerialisation and electronic transfer of securities
- Securities lending and borrowing
- Professionalisation of trading members
- Fine-tuned risk management systems
NSE Market and Session Timings
Pre Opening Time | Normal Trading Session | Post Closing Session |
|---|---|---|
9:00 am to 9:15 am | 9:15 am to 3:30 pm | 3:30 pm |
9:00 am to 9:08 am | 3:30 pm to 3:40 pm | |
9:08 am to 9:12 am
| 3:40 pm to 4:00 pm | |
9:12 am to 9:15 am |
Block Deal Session Timings are divided into two windows:
Morning Block Deal Window - operates between 8:45 am to 9:00 am
Evening Block Deal Window - operates between 2:05 pm to 2:20 pm
NSE Holidays
The stock market is closed on public holidays and weekends. Here is the list of public holidays in 2022:
Name of the Holiday | Date | Day |
|---|---|---|
Republic Day | 26th January | Wednesday |
Maha Shivaratri | 1st March | Tuesday |
Holi | 18th March | Friday |
Ram Navami | 10th April | Sunday |
Mahavir Jayanti | 14th April | Thursday |
Good Friday | 15th April | Friday |
Id- ul - Fitr | 3rd May | Tuesday |
Muharram | 9th August | Tuesday |
Independence Day | 15th August | Monday |
Ganesh Chaturthi | 31st August | Wednesday |
Gandhi Jayanti | 2nd October | Sunday |
Dussehra | 5th October | Wednesday |
Milad-un-Nabi | 9th October | Sunday |
Deepavali* | 24th October | Monday |
Goverdhan Puja | 25th October | Tuesday |
Guru Nanak's Birthday | 8th November | Tuesday |
Christmas | 25th December | Sunday |
The market is closed on Deepavali but since it is considered one of India’s main religious festivals, trading takes place between 5:30 pm to 6:40 pm. This time is considered to be auspicious and trading during these hours is called ‘Muhurat Trading.’
Impact of Technological Advancement on NSE
Technology has impacted NSE by creating greater ease of trading:
- There are no transaction costs in trade
- Market participants have unrestricted access to information
- All participants are rational profit-seeking investors
- New information enters the market at random
- All participants are aware of the consequences of current information.
As a result, in a market populated by rational profit-seeking investors, prices fully absorb knowledge, allowing for perfect arbitrage. Information collecting is expensive in such an efficient market, and there are no returns on such operations.
Even if knowledgeable traders notice a bullish market based on their information, they bid up prices, while informed traders observe a negative market, they bid down prices, and these trading techniques are reflected in prices, making information previously hidden by informed traders public.
The Indian stock market is advancing and demonstrating to the rest of the world that they are quite robust. They've also grown quite appealing to international investors as India progresses toward being a developed nation from a variety of angles.
However, because of the high amount of skilled speculating in the markets, the markets are not assisting the average investor. As a result, SEBI will have to move heaven and earth to further streamline stock market activities in order to meet global challenges.
Even then, people keep an eye on the trading time and holidays as they closely monitor the market.
Frequently Asked Questions
Q1. How many NSE holidays were there in 2021?
In 2021, the stock market was closed for 14 days due to public holidays.
These included Good Friday, Republic Day, Holi, Mahashivratri, Ambedkar Jayanti, Ramzan, Ram Navami, Bakri Eid, Ganesh Chaturthi, Muharram, Dussehra, Diwali and Guru Nanak Jayanti, among others. Holidays that fell on the weekend included Christmas, Mahavir Jayanti, Independence Day, Maharashtra Day and Gandhi Jayanti.
Q2. How many NSE holidays are there in 2022?
Fourteen holidays are falling on weekdays when the markets will remain closed.
These include Diwali( Bali Pratipada and Laxmi Pujan) Republic day, Mahashivratri, Good Friday, Ramzan, Eid, Ambedkar Jayanti, Muharram, Ganesh Chaturti, Independence day, and Dussehra. Four public holidays fall on the weekend- Christmas, Milad-un-Nabi, Ram Navami and Gandhi Jayanti.
Q3. What is the timing for morning trading?
Market volumes and pricing can be erratic first thing in the morning. During the opening hours, the market considers all of the events and news releases that have occurred since the last closing bell, contributing to price volatility.
If you're a beginner, you should avoid trading during these risky hours, at least for the first hour. A good trader may be able to see the right patterns and profit quickly, while a less experienced trader may incur significant losses as a consequence.
However, for seasoned day traders, the first fifteen minutes after the opening bell is an ideal trading time, with some of the largest transactions of the day on the early trends.
The Eastern time (ET) period is frequently one of the finest hours of the day for day trading, with the largest changes occurring in the smallest amount of time.The doors open at 9:30 a.m. and close at 10:30 a.m. Many skilled day traders quit trading around 11:30 a.m.
since volatility and volume tend to decrease at that time. As a result, trades take longer to complete and changes are smaller with less volume.
Q4.What are Sensex and Nifty?
A stock index, often known as a stock market index, is a metric for determining the worth of a segment of the stock market. It's calculated using the weighted average prices of a group of stocks. Investors and financial managers use it to define the market and compare the returns on various assets.
The two most important indicators in the Indian stock market are the Sensex and the Nifty. The Sensex is a stock market index that tracks all of the BSE's main firms.The Nifty is a stock market index that represents all of the NSE's biggest firms.
When the Sensex rises, it signifies that the stock prices of most of the BSE's big businesses have risen as well. If the Sensex plummets, this indicates that the stock prices of the majority of the BSE's main stocks have fallen. The same may be said for the Nifty and the NSE.
There are numerous additional indices besides the Sensex and the Nifty. There is an index that indicates whether mid-cap equities are rising or falling. The -BSE Mid-cap Index' is the name of this index. Metal stocks have their own index.
For FMCG equities, there is an index. Automobile stocks, for example, have their own index. There are a variety of alternative indexes available.
Q5. Is NSE closed on Diwali?
NSE is closed on Diwali as it is a public holiday, however, it opens for a few minutes for trading. This time is considered to be an auspicious time for trading and these hours are referred to as ‘muhurat trading’.
The market is open in the evening for some time. This time matches with that of Lakshmi Pooja which takes place in most households in the evening of Diwali.
Q6. What are the functions of SEBI?
The Securities and Exchange Board of India (SEBI) is the primary regulator for Indian stock exchanges, and it was founded under the SEBI Act 1992. SEBI's key responsibilities are to protect investor interests, promote, and regulate the Indian securities markets.
SEBI laws apply to all financial intermediaries licenced by their respective authorities to engage in the Indian securities markets, whether native or international. To engage in the Indian securities markets, foreign portfolio investors must first register with DDPs.
It needs to ensure fair dealings in securities, create a market where funds can be raised at a low cost, protect investors' interests and rights, regulate and develop a code of conduct to ensure fair dealings by market intermediaries, promote and regulate self-regulatory organisations, registering and regulating the operations of venture capital funds and mutual funds and prohibiting insider trading.
Q7. What are the popular trading platforms in India?
The share market can be entered through brokerage agencies that are registered as per the trading laws. A stock investing platform will help in assessing good companies that are listed in NSE/BSE. One can buy and sell shares by creating a trading account with their banks/financial institutions.
Other options are Zerodha, Share India etc.
Q8. What is the concept of herd mentality in the stock market?
In rising economies like India, capital market liberalisation has resulted in a huge rise in investor activity.
Because of the rise in foreign stock portfolio flows and the growing presence of FIIs, local investors are more likely to mimic their FII counterparts' investing strategies. Herd mentality exists in the stock market and is seen more in emerging markets where there is asymmetric information.
