Commodity Market Timings in India (2024)

The commodity market in India has become a popular avenue for wealth creation among investors and traders. One of the many reasons for this surge in interest is the fact that the commodity market timings are highly convenient. This makes it accessible to a wide range of traders across the country.

To better understand the commodity market timings in India, let us begin with the concept of the commodity markets in general.

What is the commodity market

The commodity market is a financial marketplace where derivative contracts (like futures and options) of a wide range of commodities are bought and sold.In India, commodities are broadly classified into two categories: Agricultural and non-agricultural commodities.

Agricultural commodities include cereals, pulses, oils, oil seeds, fibres, and spices, among others. Non-agricultural commodities include crude oil, natural gas, base metals, and precious metals like gold and silver.

The commodity market enables traders and investors to generate returns by capitalising on the price movements in commodities. It also provides commodity wholesalers and retailers a platform to hedge against potential adverse price movements.

What are the different commodity exchanges available in India

Before we look at the commodity market timings, here is a quick rundown of the different exchanges where commodity derivative contracts are traded regularly.

• Bombay Stock Exchange (BSE)
• National Stock Exchange (NSE)
• Multi Commodity Exchange of India (MCX)
• National Commodity and Derivatives Exchange (NCDEX)
• Indian Commodity Exchange (ICEX)

The Multi Commodity Exchange of India (MCX) and the National Commodity and Derivatives Exchange (NCDEX) are the most popular bourses among this list of commodity exchanges.They witness strong trading volumes in this market segment each day.

What are the commodity market timings in India

The commodity market timings differ from the timings of the equity market. Here is a brief outline of when the commodities segment opens and closes for trading in India.

Pre-market session

The pre-market session is a 14-minute special trading session from 8:45 AM to 8:59 AM. During this session, traders and investors can cancel their pending orders before the market opens for regular trading. However, not all commodity exchanges host a pre-market session. Only the Multi Commodity Exchange of India (MCX) has a pre-market session.

Normal trading hours

The normal commodity market timings are divided into two sessions — the morning session and the evening session. The morning session lasts from 9:00 AM to 5:00 PM, whereas the evening session lasts from 5:00 PM to 11:30 PM. However, when daylight saving time (DST) is active in the US, the evening session lasts from 5:00 PM to 11:55 PM.

In addition to this, the commodity market timings also vary depending on whether the commodity is a regular agricultural commodity, an internationally referenced agricultural commodity, or a non-agricultural commodity. The table below outlines the different trading hours for each category.

Muhurat trading session

Similar to the equity segment, commodity exchanges also conduct a special one-hour trading session each year on the day of Diwali.This session is termed the Muhurat trading session and is usually held from 6:00 PM to 7:15 PM on Diwali.

However, the actual timings may vary, and the exchanges will notify you separately each year. Since the day of Diwali is highly auspicious, traders and investors widely believe that investing in securities during this special trading session can bring them financial prosperity.

Also read: Share market timings in India

Trading hours for major commodity exchanges

The general trading hours for commodity exchanges in India are divided into two trading sessions:

• Morning sessions: 10:00 A.M. to 11:30 A.M.
• Evening sessions: 5:00 P.M. to 11:30 P.M.

Trading is held from Monday to Saturday, excluding holidays. For better understanding, let us observe the trading hours of major commodities through the table below:

What are the trading holidays for the commodity market

The commodity market is open for trading on all weekdays, i.e., from Monday to Friday. It remains closed on Saturdays and Sundays. The market remains closed on all notified public and national holidays.

However, the commodity market will be open for trading for one session alone on certain public holidays.For more detailed information on these dates, you can check the commodity market trading calendar hosted on the online platforms of the commodity exchanges in India.

Also read: NSE Holidays

What is the ideal time for trading in commodities

Now that you are aware of the different commodity market timings, let us look at when you need to trade in this segment for the best results.

Simply put, there is no ideal time to trade in commodities. The decision about timing your entry and exit is largely dependent on personal preferences and other factors like your trading objectives and the prevailing market conditions.

For instance, volatility and liquidity are often high when the market opens and closes. This may offer you ample trading opportunities. However, the risk also tends to be quite high during such times, so they are more suitable for risk-aggressive traders and investors.

In addition to market opening and closing times, the commodity market may also witness high volatility and liquidity when economic data are released or when trading hours overlap. Overlapping trading hours typically occur when the commodity markets of two different geographical regions, like Asia and Europe, intersect.

That said, volatility usually subsides as the trading session progresses and price movements stabilise. So, these times may be more suitable for traders and investors with moderate risk tolerance levels.

Factors affecting commodity market timings

Have you ever wondered why the commodity markets have different timings than the traditional stock market? That’s because commodities are influenced by several factors, such as global supply and demand, time zone disparities, and seasonal variations. These factors collectively shape the operational hours of commodity markets worldwide. Let’s understand them in detail:

1. Global supply and demand

Trading hours are normally adjusted based on fluctuations in global supply and demand for commodities. For instance, let us assume a major geopolitical event increases the demand for crude oil. This heightens market activity in the commodity, and the exchange extends trading hours to accommodate it.

2. Market regulations

Regulatory bodies establish trading hours to ensure fair and transparent market operations. These regulations aim to provide equal market access to all traders and maintain market integrity.

3. Time zone differences

Since commodity markets are global, time zone disparities across countries and regions influence trading hours. Additional working hours in different time zones usually affect the scheduling of commodity market trading sessions.

4. Economic and political events

Events like changes in government policies or natural disasters in key commodity-producing areas significantly impact market timings. Usually, such events trigger increased volatility, which prompts the commodity exchanges to extend trading hours.

5. Seasonal demand

Seasonal fluctuations in demand for certain commodities also lead to adjustments in trading hours. For example, agricultural commodities experience higher demand during planting and harvesting seasons. This creates the need to extend trading hours to accommodate increased market activity.

Also read: BSE Holidays

Best times to trade in the commodity market

Numerous studies have revealed that traders who effectively time the market often gain the most from commodity markets. This requires an understanding of the periods during which commodity trading is the most favourable. Let’s see some of the best times when you can trade to maximise your profit potential:

1. Opening hours

The initial hours after the commodity market opens offer high liquidity and trading volumes. These opening hours are considered one of the best trading times, as trades are executed easily due to increased market activity.

2. Overlapping trading hours

When trading hours overlap between markets, such as Asian and European markets, trading activity intensifies, particularly for commodities like gold and crude oil. This period is also a good MCX trading time to enter or exit positions.

3. Economic releases hours

Economic data releases, such as GDP numbers or interest rate announcements, trigger significant price movements in commodities. These times also offer lucrative trading opportunities for informed traders.

4. Seasonal factors

Seasonal fluctuations, influenced by weather patterns or agricultural cycles, impact commodity demand. Understanding these seasonal trends allows traders to capitalise on predictable price movements, like increased natural gas demand during winter for heating purposes.

5. Volatile periods

While market volatility poses challenges, it also offers trading opportunities. Periods of heightened volatility often result in price fluctuations. These price changes allow traders to profit from rapid price movements through well-timed trades.

Conclusion

The commodity market timings are quite flexible, making it a convenient segment for most traders. The division of the market into morning and evening sessions offers traders and investors — even those with full-time jobs — a chance to participate in commodity trading.

However, it is essential to note that trading in commodities can be quite complex, especially for beginners. If you are interested in this market segment, you must first understand the structure of the commodity market before you begin trading.