India’s Sudden Market Holiday Risks Denting Global Image
Image Source: Deccan Herald
India’s abrupt move to suspend equities and currency trading gave global investors a reminder of how Wall Street – favored market can still act more like a frontier economy.
The sudden announcements risks undermining India’s efforts to brand itself as a market – friendly nation that adheres to global standards under Prime Minister Narendra Modi, India has emerged as an alternative to China, powered by its fast economic growth, an expanding middle class and rising manufacturing prowess.
That boosted its equity market value to the world’s fifth largest, not far below Hong Kong “a longer period of notice and better communication would help contain any disruptions and surprises,” said Sameer Kalra, Mumbai based founder of Target Investing.
“Apart from disruption of work life for some, such events can also lead to problems in algo trading.” The inauguration of the Ram Temple marks a new milestone in Modi’s project of reshaping the country into a more avowedly Hindu nation.
Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore, said the holiday was a surprise and would affect this week’s trading volume. Some participants on social media X (Twitter) were not happy with India’s decision to close markets.
Charu Chanana at Saxo Capital Markets Pte., however, sees the trading disruption as having minimal impact on India’s standing among global investors. “These sudden changes to the trading schedule are less of a concern compared to what emerging markets are used to such as political instability or capital controls,” said Chanana, a market strategist for Saxo. “It doesn’t change the fact that India is the fastest growing economy in the world, with a strong demographic profile.”
Hence, this week will be a truncated week for the stock markets as per the list of stock market holidays in 2024, the Indian stock market will remain closed till 26th January i.e. on Friday this week for the Republic Day celebration across the nation.
The trading activities in the entire Indian stock market will remain suspended till Friday. BSE further clarified that the Exchange shall observe a holiday declared under Section 25 of the Negotiable Instruments Act, 1881 vide RBI press release 2023 – 24.
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