NCDEX plans session in sync with US markets

The National Commodity and Derivative Exchange (NCDEX) will begin evening trading sessions by third week of February. The sessions will facilitate concurrent trading with US markets.

"We will begin evening session for all the commodities by third week of the current month," Narendra Gupta, deputy managing director, NCDEX, said.

The evening trading session is most likely to begin at 7pm India time and close at 11pm to enable futures traders to synchronise trading with US markets.

Evening trading is expected to lead to rise in volumes and trades, particularly in gold and silver. Some parallel trading with US markets in cotton and oilseed futures is also expected, but precious metals are likely to be the most traded category.

Gold futures trading on the commodities division (COMEX) of New York Mercantile Exchange (NYMEX) is considered the global futures market benchmark. COMEX gold futures and options provide an alternative to traditional means of investing in bullion, coins and mining stocks to producers and users.

The underlying product price, which is gold price in the spot market, is benchmarked against the London morning and afternoon fix announced twice a day by the London Bullion Market Association (LBMA). London is the global hub of over the counter (OTC) trade in precious metals.

Indian production of gold and silver falls far short of demand demand. Gold buyers depend on imported gold. The overseas price of gold is directly reflected in domestic markets after price conversion.

NCDEX kicked off futures trading on December 16, 2003, and currently clocks average daily turnover of around Rs 20-25 crore in 10 commodities - gold, silver, mustard seed, mustard oil, soya bean, soya oil, long staple cotton, medium staple cotton, RBD palmolein and crude palm oil (CPO).

The exchange plans to launch futures in pepper, castor oil, guar, tea, coffee, jute and ferrous and non-ferrous metals soon. Futures trading in other commodities for delivery in physical form will follow.