Speaking to The Financial Express NSE managing director Ravi Narain said, "There are two aspects which need to be looked at before starting an extended trading session. One is of shares still traded in physical form and the other is the automation of brokers' back-office software."

"Although 99 per cent of shares traded today is in the demat form, there are physical shares still under objection. It would take another six months for these physical shares to get dematerialised. With regard to brokers' back-office, it has to be fully automated to take care of the extended trading session. Unless the back-office is fully automated, it would be difficult for the small brokers to carry-on with the extended trading hours.

Only after both these issues are addressed, we would consider the idea of starting the evening trading session," added Mr Narain.

Mr Narain further said that the exchange had earlier contemplated with the idea of starting an evening trading session but it was turned down by the brokers' community.

It can be recalled that OTC Exchange of India had already started the evening trading called OTCEI high-trade market (OHM) in equities and the Bombay Stock Exchange (BSE) has also shown interest to start with the evening trading session initially in the derivatives segment. The opening of the evening trading session would coincide with the international markets, which open at different time zones. The domestic market can discount any major domestic and international news events, which otherwise get discounted the next day.

The advent of the bigger exchanges into the extended trading session would ensure sufficient demand-supply of equities, leading to better price discovery.