The Indian stock market will be closed Friday, April 3 for a shorter trading week and an extended weekend. The Bombay Stock Exchange and National Stock Exchange also announce they are closing for a holiday.
This market holiday took place just one day after the suspension in stock market due to Mahavir Jayanti (March 31), which made the market shut down for the second time this week. In the event of a loss of early market days there will be a lack of trading for both the investors and traders and this might affect their short-term and long-term market strategies and market liquidity.
We believe in fact that the closure is not just about stocks as much as commodity prices. The Multi Commodity Exchange will be closed both in morning as well as evening sessions; that will mean equity trading and derivative trading will not happen.
In the world of investment, this halt in trading might be expected for the several international markets (the United States, Europe, Canada and Australia also observe Good Friday as a holiday) trading in which there are all around the world, but as global exchanges continue to shut themselves up at the end of the trading period, in this time period, this may be followed across the line of trade.
Market Outlook Remains Mixed
Despite all those holidays that intervened, Indian markets started April on a high note. The BSE Sensex was up more than a cent, and the Nifty 50 was up by nearly a hundred.
But we remain cautious about the market's status. There are various global uncertainties in terms of geopolitical instability and these are driving investor behavior. In this regard, growing crude oil prices around $100 per barrel have placed pressure on the Indian economy and the economy in general.
Market analyst Nitant Darekar at Bonanza noted that long-running geopolitical conflicts have already weakened the rupee as well as prompted continuous foreign institutional investor (FII) outflows in March. The latter are macroeconomic pressures which should not be overlooked despite the positive environment on the market, he said.
At the same rate, valuations seem at this time attractive. The Nifty is trading on average at 19 times earnings, lower than its 10-year average price point of around 22 times earnings. And such a margin of safety could also be attractive in the long term if long-term investors are willing to handle risk in the short term.
What Investors Should Know
As markets are closed on April 3, investors should plan for their trades and prepare for lower trading days and keep an eye also at the same time on the fact that this means they will be losing less days to trade when there is less time to move; a shorter week will have a greater risk of price swings that we can expect than during week's end or what may be volatile after that (market signals change during business hours).
But market participants will be watching in the near future to see how we do in terms of global developments and domestic messages when trading returns for this week.
