Extending trading hours for major global stock markets seems to be a new trend, with exchanges in countries such as the United States and Japan recently pressing the "delay button".
Recently, the New York Stock Exchange announced plans to extend the trading hours of its fully electronic exchange, NYSE Arca, to 22 hours per business day, pending regulatory approval. The extended trading hours will start at 1:30am Eastern Time every day and continue until 11:30pm. All stocks, ETFs (exchange traded funds), and closed-end funds listed in the United States will be subject to this "22 hour" trading system.
The current trading hours on the New York Stock Exchange are from 4am to 8pm Eastern Time in the United States. The extended trading hours mentioned above belong to the commonly known pre - and post market trading of the US stock market, which refers to US stock trading conducted outside the normal trading hours (9:30-16:00).
The market leader of the New York Stock Exchange stated that the exchange is pleased to provide US stock trading services to traders from all time zones around the world, continuing to lead the market development.
Forced to extend trading hours?
Analysts have pointed out that assets such as cryptocurrencies can now be traded 24/7, attracting a large number of funds who are unwilling to "sleep" to participate in trading. This trend has put some pressure on the New York Stock Exchange, forcing it to consider extending trading hours and conducting a survey of market participants earlier this year to understand the advantages of 24/7 stock trading.
On the 28th, Zhao Qingming, Vice President of the Information Research Institute of the State Administration of Foreign Exchange, stated in an interview with China News Service's Guoshi Express reporter that the round the clock trading of cryptocurrencies has a certain impact on the extension of trading on the New York Stock Exchange, but the more important reason is that with the accelerating degree of global financial integration, extending trading hours in major stock markets is becoming a new trend.
Zhao Qingming pointed out that the interconnectivity of global financial markets is constantly increasing, cross-border transactions are becoming more frequent, and the demand for global investors to allocate assets and manage risks across regions is significantly rising. In addition, the information technology conditions behind trading and settlement are becoming increasingly mature. All parties in the market generally hope that exchanges can extend trading hours to increase trading windows and provide investors with more flexible trading opportunities. Stock markets in various countries, including Japan and China, are also striving to promote reforms in this area.
Multiple stock markets are showing signs of activity
Before the US stock market, the Japanese stock market had already made some moves. According to a previous announcement from the Tokyo Stock Exchange in Japan, the exchange has decided to extend trading hours by 30 minutes starting from November 5, 2024. The closing time will be extended from 3pm to 3:30pm, and the trading hours for the entire day will be increased to 5.5 hours. The Tokyo Stock Exchange emphasized that this move is in response to changes in the market environment and the diversification of investor demands, as well as to further improve the convenience of market participants and enhance the global competitiveness of the Tokyo Stock Exchange.
In terms of the Chinese stock market, in August 2023, the relevant person in charge of the China Securities Regulatory Commission proposed to study the appropriate extension of trading hours in the A-share market and exchange bond market to better meet investment and trading needs when answering questions from reporters about activating the capital market and boosting investor confidence.
A research report by China International Capital Corporation (CICC) pointed out that compared to the trading hours of major global stock exchanges, the daily trading hours of A-shares are shorter. Extending the trading hours of A-shares will help improve the activity of securities trading, facilitate the alignment of the A-share trading system with international standards, and contribute to the internationalization process of A-shares.
Liang Fengjie, an analyst at Zheshang Securities, stated that the trading hours of A-shares are generally lower than those of major overseas markets, including Hong Kong stocks. If the trading hours of A-shares are extended, especially by delaying the end of the afternoon session, it is expected to increase the overlap between A-shares and Hong Kong stock trading periods, enhance interconnectivity, benefit more cross-border and interconnectivity product trading, and attract more international investors to invest in A-shares.