The Reserve Bank of India (RBI) has reduced the trading hours of the debt and currency markets from April 7 because of the lockdown.

In a circular on Friday, the central bank said the revised market timings will be effective till April 17. Under the revised timings, the markets will open at 10am instead of 9am and close for trading at 2pm for all segments. The RBI added that the lockdown has adversely impacted the functioning of the financial markets.

This is for the first time, at least in recent years, that the RBI is cutting short the trading hours in the money and forex markets for such a duration.

The RBI said that the market timings have been revised in order to “minimise these risks” and to ensure that market participants maintain adequate checks and supervisory controls, while optimising thin resources and ensuring the safety of personnel.

According to the circular, the timing of the government securities (central government securities, state development loans and treasury bills) market has been revised to 10am to 2pm from the existing 9am to 5pm. Similarly, the timing for the foreign currency (FCY)/ rupee trades, including the forex derivatives as well as the rupee interest rate derivatives market, have been changed to 10am to 2pm from the existing 9am to 5pm.

The RBI further pointed out that the unprecedented situation created by the Covid-19 outbreak has necessitated lockdowns, social distancing, restrictions on the movement of people and non-essential activities, work from home arrangements and business continuity plans.

The resultant dislocations have adversely impacted the functioning of the financial markets. Staff and IT resources have been severely affected, posing operational and logistics risks, it said.

“The thinning out of activity is impacting market liquidity and increasing volatility of financial prices,” the circular added.

However, all regular banking services for customers, including RTGS, NEFT and other retail payments systems will continue to be available according to current timings, the RBI said.

Last month, RBI governor Shaktikanta Das had said that the central bank has quarantined 150 members of its staff and service providers together with the IT facilitators as part of a business continuity plan.

Stock market timings

The timings for the stock markets remained unchanged. Trading currently takes place from 9.15am to 3.30pm.

The wider market has been under pressure because of concerns over the impact of coronavirus on the Indian volatility index (VIX). While an increase in VIX implies that investors are expecting higher volatility, the Indian VIX has been falling and is now at 55.0175.

“India VIX eased further and was down 21 per cent from 72 to 55 this week. A relief rally excluding BFSI stocks indicates a high probability of a sharp pullback of the Nifty on the sustenance above 8350 levels,” according to Shrikant Chouhan of Kotak Securities.

Meanwhile, equity indices spiralled lower for yet another session on Friday, pressured by heavy selling in bank stocks, as the steady rise in Covid-19 cases fuelled uncertainty over the economic impact of the pandemic.

Unabated foreign fund outflows and a depreciating rupee, which skidded below the 76-mark against the dollar, further kept investors on the sidelines, traders said.

After hitting a low of 27500.79 during the day, the 30-share BSE barometer ended 674.36 points, or 2.39 per cent, lower at 27590.95. The NSE Nifty shed 170 points, or 2.06 per cent, to finish at 8083.80.

During the holiday-truncated week, the Sensex lost 2224.64 points, or 7.46 per cent, while the Nifty sank 576.45 points, or 6.65 per cent.

Bank stocks came under heavy selling pressure on Friday after Moody’s changed the outlook for the Indian banking sector to negative from stable.

Axis Bank was the top loser in the Sensex pack, cracking 9.16 per cent, followed by IndusInd Bank, ICICI Bank, Titan, SBI, Maruti, HDFC and Asian Paints.

The rupee depreciated 53 paise to 76.13 against the dollar. Brent crude futures rallied 8.15 per cent to $32.36 per barrel amid hopes that Russia and Saudi Arabia will end a price war.