To celebrate the opening of a major Hindu temple, bourses said late Friday that the nation’s $4.3 trillion stock market would be closed Monday and instead trade on Saturday — during which there was thin liquidity. Currency trading was also suspended.
The sudden announcement 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, the 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 in northern India on Monday marks a new milestone in Modi’s project of reshaping the country into a more avowedly Hindu nation. The inauguration takes place as Modi campaigns for a third term in elections later this year.
Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore, said the holiday was a surprise and will affect this week’s trading volume. Some participants on social media X 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.”