Indian equity markets will remain open for trading on Sunday, February 1, even though it is a weekend. The special trading session has been scheduled to allow investors to react instantly to the Union Budget announcements. While buying and selling of shares will be permitted during regular market hours, investors must be aware that normal settlement procedures will not be in force on the day.
Limitations applied
Although trades will be executed on February 1, the settlement infrastructure will remain closed as banks, clearing corporations and depositories do not operate on Sundays. India follows a rolling settlement system, where equity trades are typically settled on a T+1 basis, meaning one business day after the trade date. Since February 1 falls on a non-working day for settlement entities, all trades executed on Budget Day will be settled only on Monday, February 2.
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This means that shares purchased on February 1 will not be credited to demat accounts until the next business day, making it impossible to sell them immediately after purchase. Similarly, funds received from sales on Budget Day will not be available for use until settlement is completed.
Impact on traders and investors
The special trading session allows market participants to respond to policy announcements in real time, but it limits short-term trading flexibility. Intraday strategies and quick buy-and-sell moves are effectively restricted because ownership transfer does not take place on the same day. Investors who had planned to square off positions around Budget Day must account for the delayed settlement cycle.
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What investors should keep in mind
Budget Day trading offers an opportunity to position portfolios based on policy cues, but it also requires careful planning. Understanding settlement timelines is crucial to avoid liquidity issues or execution surprises. While price discovery will happen on Sunday, the actual transfer of shares and funds will only occur once markets resume normal settlement operations on Monday.
