What Nasdaq’s Near 24-Hour Trading Proposal Means For India’s Stock Market

Nasdaq, the technology-heavy US stock exchange, submitted a formal proposal to the US Securities and Exchange Commission (SEC) on December 15 to operate for 23 hours a day, five days a week.  

At present, US markets operate for about 16 hours a day, including pre-market and after-hours sessions. If approved, Nasdaq will switch from its current 16-hour trading schedule to a two-session structure. According to the proposal, the day session will run from 4 AM to 8 PM ET (2:30 PM to 6:30 AM IST), followed by a one-hour break for maintenance, testing, and clearing trades. A new night session will then operate from 9 PM to 4 AM the next day (7:30 AM to 2:30 PM IST). Trades executed during the night session before midnight will be treated as trades for the following trading day.

Other major exchanges, including the New York Stock Exchange and Cboe Global Markets, have also announced plans to introduce 24-hour trading.

Why Is Nasdaq Pushing For Round-The-Clock Trading Hours?

The exchange’s proposal for extended trading hours comes amid rising retail participation and strong global demand for US equities. Growing wealth across major economies has lowered barriers to market access, which has led to a sharp increase in overseas investor interest in US stocks.

Earlier this year, in March, Nasdaq President Tal Cohen, in a LinkedIn post, said, “Now, as the industry considers the growing interest in 24-hour trading, we stand at yet another pivotal moment – one that has the potential to broaden investor access, expand wealth-building opportunities, and redefine how markets function.”

Cohen attributed the push for round-the-clock trading hours to rising participation from investors outside the US, particularly in Asia. “Investors are increasingly turning their attention to US markets, drawn by the depth of opportunities, strong regulatory framework, and access to high-growth sectors such as technology and healthcare,” he said.

According to Cohen’s post, “Liquidity, transparency and integrity remain the lifeblood of vibrant markets,” and warned that trading outside traditional hours can involve higher transaction costs.

What It Means For the Indian Stock Market

Round-the-clock trading hours will make domestic stock markets more sensitive to US cues, as global developments will likely get priced in faster rather than at the next day’s open. Analysts say this could improve price discovery and open limited arbitrage opportunities for sophisticated players, and it may also lead to higher short-term volatility.

Faster Transmission of Global Cues

Ross Maxwell, Global Strategy Operations Lead at VT Markets, said “the biggest impact would be on information flow and sentiment timing.” At present, US market cues are largely reflected in Indian stocks on the next day’s open. With continuous US trading, “price discovery will become continuous,” which will allow domestic investors to respond to US market developments even before domestic markets open.

Manasvi Garg, Sebi-registered investment advisor and founder of Moneyvesta, echoed this view, saying extended hours could allow Indian participants to react immediately to US earnings, Federal Reserve signals, and global news, which could reduce the risk of sharp overnight gaps on some days.

Volatility Likely to Rise

Maxwell said round-the-clock US trading could “increase overnight volatility,” especially in globally sensitive sectors such as IT, pharma, and metals. This could result in sharper opening gaps and higher short-term market swings, he said.

Garg said that trading outside core US hours typically sees thinner liquidity and wider price swings, which could spill over into Indian markets through global sentiment. Sudden moves in US technology stocks, he said, could quickly influence Indian IT indices and heighten intraday volatility.

Arbitrage and Tactical Trading Opportunities

Extended US trading hours could create limited arbitrage opportunities, though largely for sophisticated players. According to Maxwell, overlapping trading windows may open tactical opportunities, particularly in American Depository Receipts (ADRs). “Indian investors with access to global platforms could exploit price discrepancies between US-listed ADRs and their Indian-listed counterparts,” he said.

Several large Indian companies, including Infosys, ICICI Bank, HDFC Bank, Wipro, and Dr Reddy’s, have ADRs listed on US exchanges to tap American capital and expand their global investor base. These listings allow US investors to gain exposure to Indian stocks in dollar terms.

However, Maxwell added that pure arbitrage opportunities are likely to be short-lived due to transaction costs and capital controls.

Adding to that, Garg said similar opportunities could emerge across index futures and global exchange-traded funds (ETFs), but warned that speed, technology and liquidity would be key constraints. “If markets are open more of the day, fund managers or algo traders could exploit brief mispricings,” he said, adding that big institutions will likely have the edge as timing an arbitrage trade requires speed and technology, which they have.

Garg added that retail investors are likely to benefit more from directional cues than systematic arbitrage.

Impact On Rupee Limited

According to Maxwell, the extended US equity trading could lead only to a “small increase in volatility” in USD/INR. He said the impact may be muted as forex markets already trade around the clock. “Sharp moves in US equities during Indian market hours could trigger faster adjustments in foreign portfolio flows, impacting the rupee intraday rather than overnight,” he said.

Garg said that “historically, declines in US equities tend to strengthen the dollar as a safe haven, pressuring emerging market currencies like the rupee,” while rallies in US markets can have the opposite effect. He added that strong US earnings released during Indian night hours could influence US futures, shape dollar sentiment, and impact the rupee’s opening levels.

However, both analysts acknowledge that the USD/INR pair is largely driven by broader factors such as India’s macro fundamentals, Reserve Bank of India’s (RBI) intervention, trade balances, interest rate differentials, and foreign capital flows, and extended US trading hours are likely to affect short-term volatility and price discovery rather than change the currency’s underlying trend.

Sebi’s Earlier Proposal To Extend Trading Hours That Never Went Through

In 2018, market regulator Securities and Exchange Board (Sebi) had proposed to extend the timing of equity derivatives trading until 11:55 PM to align with commodity markets. The proposal was never implemented by stock exchanges after strong resistance from brokers, who raised concerns around operational costs, staffing, and thin liquidity late in the day.