Nov. 19 (Bloomberg) -- India’s drive to extend stock trading to the longest in Asia has stalled as brokers and money managers oppose the move, hindering efforts to attract more investors from overseas.

Regulators on Oct. 23 permitted trading from 9 a.m. to 5 p.m., adding 2 hours 25 minutes to the day. Bourses won’t extend until there’s a consensus on timing and most market participants oppose the change, said Ravi Narain, chief executive officer at the National Stock Exchange of India Ltd.

India sought a longer trading session to attract foreign funds and sustain the biggest rally in equities in 18 years. Investors opposed the plan because it would “fatigue” traders and back-office staff and wouldn’t align India with overseas markets, according to UTI Asset Management Co.

“For capturing all news flows globally, a 24-hour market will be required,” said Anoop Bhaskar, who oversees $5 billion in stocks at Mumbai-based UTI Asset Management, India’s oldest money manager. “I’m not sure longer trading hours will result in higher volumes.”

The national exchange and Bombay Stock Exchange, Asia’s oldest, trade for five hours, 35 minutes a day. That compares with four hours on the Shanghai Stock Exchange and 6 1/2 hours on the Singapore Exchange.

Deutsche Boerse AG, operator of the Frankfurt Stock Exchange, and Turquoise, an equity dealing system, abandoned plans for an earlier start last year after pressure from customers to leave trading hours unchanged.

Nifty Futures

The National exchange, which licensed its benchmark S&P CNX Nifty Index to Singapore’s bourse, proposed the extension to narrow the gap between share trading in India and overseas. The plan isn’t linked to the Singapore Exchange’s license, the bourse said in March.

The Mumbai-based National exchange is already the world’s third-largest in terms of the number of equity transactions and also third among derivative bourses for contracts traded in single-stock futures. The Bombay Stock Exchange, also based in Mumbai, declined to comment on the proposal.

Nifty futures start trading in Singapore at 6:30 a.m. India time. Indian stock markets open at 9:55 a.m. local time and shut at 3:30 p.m., about the same time as the close of futures trading in the city-state.

Developed markets already trade longer hours. Deutsche Boerse is open for 8 1/2 hours while the New York Stock Exchange trades for 6 1/2 hours.

“A day will come when all markets will trade 24/7,” said Nirmal Jain, chairman of India Infoline Ltd. “It is unprecedented for Indian markets. Initially, it will be a logistical challenge but with time as markets become larger, deeper, wider, these steps will happen.”

Work Shift

Trading hours should be lengthened in a phased manner with exchanges working from 9 a.m. to 4 p.m., Jain says. Brokers will have to work in two shifts and banks will need to stretch hours to enable payment of intra-day real-time margins, Jain says.

“Investors will learn that they don’t need to be present for the entire trading session,” Jain says.

Without the longer hours, overseas investors have bought $15.3 billion of equities this year, the second-highest on record, sustaining the benchmark Sensitive Index’s 76 percent gain, the most since 1991. Stocks in India are likely to rise by 30 to 40 percent within three to four years, driven by accelerating economic growth and corporate earnings, Templeton Asset Management Ltd. Chairman Mark Mobius said yesterday.

Sam Mahtani at F&C Management Ltd. in London says a longer day won’t prompt them to increase trading.

“Its not like we are going to trade more because of the extended hours,” said Mahtani, who manages $4 billion in emerging markets as director of equities. “It really doesn’t make much of a difference to us.”

For Related News and Information: News about India’s markets regulator: SEBI IN <Equity> CN <GO> Most-read stocks stories: MNI STK <GO> Sensex Member’s Ranked Returns: SENSEX <Index> MRR <GO> Graph Nifty Futures in Singapore: IHA <Index> GIP <GO> For top news on India: TOP IN <GO> Top financial services stories: FTOP <GO> Global stocks stories: TOP STK <GO>

Last Updated: November 18, 2009 23:34 EST