Unlike markets like forex or cryptocurrencies, the timings of the share market is not 24x7. As you know, shares are bought and sold between multiple parties through a medium called the stock exchange, and every stock exchange around the world keeps a certain timing for its opening and closing.
The two major stock exchanges in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The working hours of both exchanges are the same - 9:15 am to 3:30 pm from Monday to Friday. The exchanges are closed on Saturdays and Sundays. Both exchanges release a holiday list at the beginning of the year where the stock exchanges will be closed and trading does not take place on days like Gandhi Jayanti, Independence Day, etc. You can find the entire list here.
Some international stock exchanges like the Tokyo Stock Exchange and the New York Stock Exchange have lunch breaks or tea breaks, while neither of the Indian stock exchanges have either of them.
Share Market Timing Sessions in India
The share market in India is typically divided into four major sessions:
1. Pre-market session
2. Normal trading session
3. Post-market session
4. Post-closing session
The pre-market session between 9:00 am and 9:15 am is again divided into three sub-sessions for the smooth functioning of the share market.
9:00 AM to 9:07 AM: This sub-session is primarily for the order-entry before the market opens. A trader can place his/her order for buying, selling or short-selling shares during this period. In case he/she would like to modify or cancel their order, they can do it within this period.
9:08 AM to 9:12 AM: This sub-session is reserved for the matching of the orders and calculating the opening price based on demand and supply of the shares. Nobody is permitted to cancel or modify their buy/sell/short-sell orders during this period.
9:12 AM to 9:15 AM: This sub-session is a buffer period before the pre-market session and the normal trading session, used for smooth transition.
The calculation of the opening price of the day is done using a multilateral order matching system to reduce market volatility and protect retail traders. However, traders and investors typically do not participate in the pre-market session and this results in much lower liquidity in the pre-market session compared to the opening session.
Normal Market Session
The typical trading session, the normal market session runs from 9:15 am to 3:30 pm and is the duration where a lot of liquidity is present in the share market and orders are executed almost instantaneously.
Trades in the normal market session are matched using the bilateral matching process. In this process, the transaction between the buyer and seller of the shares is complete only when the buying price (bid) and the selling price (ask) are equal.
Post Market Session
The calculation for the closing price of a share or an index is done between 3:30 pm to 3:40 pm.
For a share, the closing price will be calculated as the weighted average of all the prices from 3:00 PM to 3:30 PM. On the contrary, for the Sensex (BSE index) and Nifty (NSE index), the closing price will be calculated as the weighted average of all the constituent shares from 3:00 PM to 3:30 PM.
The last 20 minutes of the trading day is the post closing session which is from 3:40 PM to 4:00 PM. At this point, traders can choose to place orders to buy or sell stock at the closing price, at which point trades will only take place if buyers and sellers agree on the closing price.
Since the Securities and Exchanges Board of India (SEBI) only allows intraday short-selling, there is no point in short-selling on the closing price at the post-closing session.
The pre-market and the post-market session are not available for the buying and selling of futures and options contracts as well. These sessions can only be used for buying or selling in the cash share market.
Each of these sessions have their own type of order to buy and sell stocks.
Special Trading Session – Muhurat Trading
A special trading occasion that takes place every year in the Indian share market is the ‘Muhurat Trading’ session. This is a special trading session during Diwali to mark the beginning of a new Samvat. While the exact trading duration and time is declared before Diwali, it is usually between 6:00 PM and 7:00PM.
It is believed that Muhurat trading is an auspicious occasion that brings in wealth and prosperity for the rest of the year