Why stocks purchased in previous trading session can not be sold on April 1, 2024?

Indian equities are observing a trading holiday today (March 29, 2024) on account of Good Friday. Further, April 1 is a clearing or settlement holiday in lieu of the annual bank closing. As a result, while you can trade as usual on April 1, 2024 (the next trading session), the settlement of securities or funds will not be possible on that day. Simply speaking, you will not be able to sell stocks purchased on the previous trading day (March 28, 2024) on April 1, 2024.

Likewise, stocks purchased on April 8 will not be allowed to be sold on April 9 as there will be a settlement holiday on that day too.

Thus, the settlement of funds/securities will be processed as detailed in the table below:

A settlement holiday is a day when no settlement takes place and no delivery of securities, including stocks and commodities, is made. So, as a result, all trades executed on the trading day are settled on the next settlement cycle, according to the respective segment.

Typically, trading and settlement holidays fall on different days, nevertheless, they can also overlap sometimes. 

Transition to T+0 settlement cycle

Indian equities follow the T+1 settlement cycle for all stocks currently, which means trade transactions get reflected in investors’ demat accounts one day after the transaction. Nevertheless, in a bid to enhance market efficiency and offer immediate liquidity to investors, Indian exchanges unveiled the beta edition of optional T+0, or same-day settlement for 25 stocks on Thursday (March 28, 2024).