Will markets open on budget day? Brokers seek special session

  • Ramsurya Mamidenna, Hindustan Times, Mumbai
  • Updated: Feb 04, 2015 23:38 IST

There is no clarity yet on whether the stock markets — Bombay Stock Exchange and National Stock Exchange — will remain open on February 28, a Saturday, which is a stock market holiday, when finance minister Arun Jaitley presents his first full budget.

BSE MD Ashish Chauhan told HT that there has been no directive so far from market regulator Securities and Exchange Board of India (Sebi) and that BSE would wait for a communication from the regulator. An NSE spokesperson also said it would comply with any decision taken by Sebi on this issue.

Several senior members of the broking community have requested Sebi to hold a special trading session on that day, citing precedents when the BSE and NSE have operated outside their regular hours. Sebi did not respond to questions from HT on this issue. There is no previous instance of the stock markets remaining shut on the day the Union Budget is presented.

If a special trading session is not approved this year, the BSE and NSE will get to react to the budget proposals a full 48 hours after the budget is presented.

This can lead to massive losses for investors who get their bets wrong as they will not be able to offload their positions early and in real-time. By the time the markets open on Monday, the full impact of the budget will have been discounted in the opening prices, depriving them the chance of cutting their losses.


Until 2000, the budget was presented at 5 pm, a British-era legacy to sync it with the opening of the London Stock Exchange. This was changed in 2001 when then finance minister Yashwant Sinha presented the budget at 11 am. Prior to that, the markets would trade from 6.00 pm to 8.00 pm for a special trading on the day the budget was presented.

This year’s budget will be closely watched by investors, markets and the common man alike, as it would not only showcase the government’s reforms measures, but also provide a cue to the Reserve Bank of India for its next monetary policy. A reduction in key lending rates by RBI generally spells good news for consumers of home, auto, personal loans, since it brings down EMIs.

RBI on Tuesday kept policy rates unchanged and said the budget would provide major data points for moves on interest rates.

“The budget is a very important event in the government’s calendar and the exchanges have always been able to reflect their views on the measures proposed immediately,” said Motilal Oswal, CMD, Motilal Oswal brokerage.

“It is the best platform for the government to test the perception to its proposals,” said Dipan Mehta, member, BSE. “Markets have been riding a bullish sentiment for most part of the year and have also been able to attract strong FII inflows, so it is natural that the markets should remain open,” added Mehta, who was also part of the brokers forum that made the representation to Sebi.

The last time markets were open for a special session was on March 22, 2014 on a Saturday, when both bourses traded for about 90 minutes to test a software that the NSE had installed.

Special sessions are annually done on Diwali when despite a holiday, brokers engage in “muhurat trading” since it is considered an auspicious day and is said to provide a direction to the markets for the rest of the year. The day is also considered a New Year according to the Hindu calendar.

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