Forex Market is the largest financial market in the world—both in terms of the volume of trades and the total value of trades. The Forex market in India operates from 9:00 am to 5:00 pm, with cross-currency trading available until 7:30 pm. However, liquidity can vary due to overlapping global trading sessions. For example, USD currency pairs may have higher liquidity during US trading hours. Although the market operates 24 hours from Monday to Friday, retail investors in India can only trade during specific hours. They can also trade currency derivatives like futures and options from 9 AM to 5 PM. Knowing these timings is important for investors looking to diversify with forex investments.
Understanding forex market timing in India
The global forex market operates 24 hours a day, primarily due to varying time zones across the world. The market is decentralised, with major trading sessions occurring in Sydney, Tokyo, London, and New York. These sessions allow continuous currency trading, except on weekends.
For traders in India, understanding the timings of these sessions is crucial, especially since the overlap between the London and New York sessions generally brings the highest trading volumes. While Tokyo is often regarded as the central Asian session, Singapore and Hong Kong have surpassed it in trading volume over the past decade.
Forex trading volume
There are more than 50 currencies that trade globally, and traders use various pairs to trade them and earn profits. However, the forex trading market is led by a few trading hubs and markets where most of the forex trading is concentrated. The major forex trading hubs where trading is concentrated are Japan, Hong Kong, Singapore, the United Kingdom, and the United States. According to a survey conducted by BIS, 78% of the overall forex trading happens in these five forex trading hubs. Within these, the UK is the leader in forex trading, contributing 38% to the global trading volume. The UK is followed by the US, which contributes 19%. Singapore contributes 9%, Hong Kong 7%, and Japan is at the lowest, contributing only 4% to the forex trading volume.
Among all the currencies that trade on forex markets, the US dollar is the most dominant and is present as a currency pair in 88% of the forex trades. The Euro is the second most dominant, with 31%, followed by the Japanese Yen at 17%, and the Pound Sterling, which is at 13%.
Indian rupee currency trading hours
In India, forex market hours start at 9:00 AM and end at 5:00 PM. The forex market opening time in India is 3 hours and 30 minutes after Japan’s and 2 hours after Hong Kong, Australia, and Singapore’s markets open. During this 8-hour window, you can trade INR currency pairs. The NSE, BSE, and the Metropolitan Stock Exchange of India offer currency futures contracts in 4 INR pairs. The permitted rupee pairs include USD-INR, EUR-INR, GBP-INR, and JPY-INR. These INR currency pairs can be traded on the authorised exchanges from 9:00 AM to 5:00 PM.
Cross-currency trading hours
Cross-currency pairs are currency pairs that do not involve the Indian rupee. Instead, they are pairs of two foreign currencies. Trades in cross-currency contracts and options on EUR-USD, GBP-USD, and USD-YPY are allowed on the same three exchanges. For cross-currency trading in India, the forex market opens at 9:00 AM and remains operational until 7:30 PM. In other words, cross-currency pairs can be traded for an additional 2 hours and 30 minutes.
Why is the forex market considered to be open 24 hours a day?
The forex market is said to operate 24 hours a day because it operates across different time zones. As one major forex market closes, another one opens, ensuring that forex is effectively traded 24 hours a day, 5 days a week. The forex market is an Over-the-Counter (OTC) market where trading happens over a network of computers rather than a physical and centralised exchange that closes at a particular time. The 24-hour forex market timings allow traders to trade at almost any time of the day.
Since the forex session times in India are affected by international time zones, as an investor, you should know the trading hours for the four major forex markets:
Major market |
Forex market timing (in UTC) |
Sydney |
9:00 PM to 6:00 PM UTC |
Tokyo |
11:00 PM to 6:00 AM UTC |
London |
7:00 AM to 4:00 PM UTC |
New York |
12:00 PM to 9:00 PM UTC |
The forex market opens at 9:00 PM UTC on Sunday, which is Monday 7:00 AM in Sydney, Australia. It remains operational until 9:00 PM UTC on Friday, which is Friday 5:00 PM in New York.
When is the best time to trade forex in India?
Traders believe that the preferable time for forex trading is when markets are most active and liquid. This usually happens when market sessions overlap. For instance, the overlapping of the London and US forex market sessions offers a prime opportunity for Indian investors. These two biggest trading sessions usually overlap from 12:00 PM UTC to 4:00 PM UTC. In other words, Indian investors can benefit from trading sessions between 5:30 PM to 9:30 PM IST. Forex traders can reap the benefits of heightened volatility and liquidity, especially in major currency pairs like EUR/USD, GBP/USD, and USD/JPY.
How to trade in rupee in forex market?
- Choose a SEBI-regulated broker offering INR currency pairs such as USD/INR or EUR/INR.
- Be aware of forex market hours in India (9:00 AM to 5:00 PM IST) and aim to trade during high liquidity periods like the London and New York market overlaps.
- Track forex market timings to identify periods of peak trading activity.
- Use a trading platform to monitor currency hours, place orders, and manage trades.
- Leverage global trading volume during European and US sessions for better trading opportunities.
How can traders participate in the indian forex market?
- Forex trading in India is allowed through exchanges such as NSE, BSE, and MCX-SX, with INR as the trading currency.
- Only four currency pairs (USD, GBP, JPY, and EUR) can be traded with INR.
- Forex trading platforms are restricted in India; traders should follow regulatory guidelines.
- The Reserve Bank of India (RBI) allows forex trading only for limited purposes, not for speculation.
- Retail investors must thoroughly understand regulations before engaging in forex trading.
Conclusion
Forex trading has gained traction in India, with traders entering the forex market hoping to mint profits by leveraging currency price movements. Indian investors with an existing Demat account can trade in forex by opening a trading account with a SEBI-registered forex broker. However, successful forex trading requires a thorough understanding of forex trading time in India. Additionally, knowing when the largest global forex markets open and close can help Indian investors draft their forex trading strategies to make potentially profitable trades.
