Understanding the stock market’s operating hours and settlement process is essential for anyone looking to invest or trade in equities. In India, the stock exchanges operate within specific hours, and trades follow a structured settlement cycle known as T+1.

Stock Market Timings in India

The two primary stock exchanges in India are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Both operate during the same trading hours.

1. Pre-Opening Session (9:00 AM to 9:15 AM)

This session is for order placement, modification, or cancellation before the actual market opens. It is divided into three sub-sessions:

• 9:00 AM to 9:08 AM: Order entry.
• 9:08 AM to 9:12 AM: Price determination and order matching.
• 9:12 AM to 9:15 AM: Buffer time before the market opens.

2. Regular Trading Session (9:15 AM to 3:30 PM)

This is the main trading session where investors and traders buy or sell securities. It uses the Continuous Trading System, where trades are matched based on price-time priority.

3. Post-Closing Session (3:30 PM to 4:00 PM)

• 3:30 PM to 3:40 PM: Closing price calculation based on the weighted average price of trades executed in the last 30 minutes.
• 3:40 PM to 4:00 PM: Investors can place orders at the closing price (known as the Call Auction Session).

Settlement Process in the Indian Stock Market

The Indian stock market follows the T+1 settlement cycle, where T refers to the trade date.

What is T+1 Settlement?

In the T+1 settlement cycle, trades are settled the next business day after the transaction date. For example, if you buy shares on Monday, they are credited to your Demat account on Tuesday.

Settlement Stages

1. Trade Execution (T-Day):

• Buyer and seller execute a trade during market hours.
• The trade is confirmed immediately.

2. Clearing (T-Day):

• Clearing corporations (like NSCCL for NSE) calculate the obligations of both parties.
• The seller delivers shares, and the buyer ensures funds are available.

3. Settlement (T+1 Day):

• Funds are transferred from the buyer to the seller.
• Shares are credited to the buyer’s Demat account.

Advantages of T+1 Settlement

• Faster Turnaround: Reduces the time between trade and settlement, improving liquidity.
• Lower Risk: Minimizes counterparty risk as trades are settled quickly.
• Efficiency: Aligns with global best practices in financial markets.

Important Notes About Stock Market Timings and Settlement

• The market remains closed on weekends and national holidays.
• Some transactions, like Initial Public Offerings (IPOs), may follow a different timeline.
• Intraday traders must square off positions before the market closes at 3:30 PM.

Conclusion

The Indian stock market operates on structured timings, starting with the pre-opening session at 9:00 AM and closing by 4:00 PM. The T+1 settlement process ensures that trades are settled efficiently and securely within one business day. Understanding these timings and settlement procedures is vital for smooth trading and investing.