Are you enjoying a mid-week break today on account of Municipal Elections across Maharashtra? Well, the Indian equity markets and banks are also closed today, January 15, for the same reason as the headquarters of both BSE and the National Stock Exchange are in Mumbai. However, this holiday has sparked a debate among investors over social media.
Market holiday for municipal election: To be or not to be?
Zerodha’s co-founder, Nithin Kamath, in a post on X (formerly Twitter), questioned the market close. He used a quote from legendary ‘master of investment’ Charlie Munger and raised questions about the relevance of this market holiday. According to him, when India wants to run parallel to international peers, its exchanges were closed for a local municipal election, which “shows poor planning and a serious lack of appreciation for second-order effects.”
“As Munger said: ‘Show me the incentive, and I will show you the outcome.’ The holiday exists because no one who matters has any incentive to oppose the market holiday. It also tells you how far we have to go before global investors take us seriously,” Read Kamath’s post.
This sparked a debate on social media. Helios Capital founder and fund manager Samir Arora promptly responded to his post and questioned the relevance of days when Indian markets are open even when they are shut in most parts of the world, like January 1.
“I hope you will say the same thing when the market is open on Sunday, Feb 1st. Why do we want the market to be open just because there is a budget that day?” said Arora. If our exchange has international linkages, is it not unfair to foreign investors to have the market open on Sunday? And what about January 1st each year?
Should markets be opened on February 1
Taking his point further, Arora raised a debate on whether the markets should be opened on February 1, when the Budget will be presented by Finance Minister Nirmala Sitharaman. Arota responded to further quotes by other X members and outlined his perspective,
“It is connected because FIIs will be on holiday, and you are opening the market on Sunday- what more global connection can you cut than to have a market where a large percentage of Institutional investors cannot participate.”
To this, many others replied to the same thread, questioning whether the budget should be presented on a Sunday at all.
As of now, it has been confirmed that the Finance Minister will be presenting the Budget on February 1, a Sunday. However, there is no update from exchanges with any information about trading on a Sunday. So far, there is only one precedent of the Budget being presented on a Sunday.
Market holiday on January 15
Trading was shut across equities, equity derivatives, securities lending and borrowing, currency derivatives and interest rate derivatives. The commodity derivatives segment was closed in the morning session, but will open for the evening trade.
Indian markets will resume normal trading on the NSE and BSE on Friday, January 16.
Indian equity markets on Wednesday
The key indices closed Wednesday’s trade on a lower note. The Nifty 50 finished 67 points or 0.26% lower at 25,665, while the BSE Sensex ended 245 points or 0.29% lower at 83,383. The Nifty Midcap 100 outperformed the benchmarks, closing 173 points or 0.29% higher at 59,770.