Diwali holds special significance for investors and traders in the stock market, thanks to the age-old tradition of Muhurat Trading. During Diwali, traders eagerly participate in Muhurat Trading, a unique one-hour trading window that is considered auspicious, with hopes of a prosperous trading year ahead.
In Hindu astrology, a Muhurat is considered an auspicious time for commencing something new. On Diwali, the Hindu calendar marks the beginning of the new year, making Muhurat Trading a symbolic start for potential good returns. On the day of Diwali, Indian stock exchanges remain closed, but this one-hour session opens up for Muhurat Trading. In 2023, Muhurat Trading is scheduled for November 12, 2023.
Typically, stock exchanges in India operate from 9:15 AM to 3:30 PM. However, on Diwali, they open only for an hour during Muhurat trading, which consists of several segments:
In India, the business and trading communities consider Diwali as the start of the new year. They open new accounts and settle the previous year’s financial records on this day. A significant tradition is the Chopra Pujan, where traders worship their books and seek Goddess Laxmi’s blessings for prosperity and success.
The tradition of Muhurat Trading started in 1957 with the Bombay Stock Exchange and later extended to the National Stock Exchange in 1992. It has now evolved into a symbolic event for individual traders.
In 2023, Muhurat Trading will take place on November 12, 2023. The trading in the equity and equity derivative segment will begin at 6:15 PM and end an hour later at 7:15 PM.
The trades executed during this session are settled on the same day. There are 15-minute pre-opening and closing sessions for trade settlement.
|5:45 PM – 6:00 PM
|6:00 PM – 6:08 PM
|6:15 PM – 7:15 PM
|7:25 PM to 7:35 PM
|6:20 PM – 7:05 PM
Muhurat Trading is a preferred activity among traders, as it’s believed to bring forth a bullish market with substantial trading volumes. This special trading session is open to both novices and experienced traders.
It carries the potential to influence the market significantly. Historical data also indicate that investors have generally witnessed favourable outcomes in the BSE Sensex special sessions, as the index closed higher in seven out of the last 10 such instances.
In the most recent two Muhurat Trading sessions, both Sensex and Nifty displayed positive performance on the auspicious trading day. In 2022, both indices saw gains of 0.88% each during Muhurat trading, and in the preceding year, 2021, they recorded increases of 0.49% each.
However, given the volatility of the stock market, it’s advisable to seek expert advice, monitor stock performances, and formulate a solid trading strategy before participating. It’s important to understand that Muhurat trading isn’t solely about making profits; many participants engage in it due to its auspicious nature.
Muhurat Trading on Diwali is a cherished tradition in India, symbolising the start of a new financial year and an auspicious time for trading and investment decisions. While it carries historical significance, it’s essential to approach it with a well-informed strategy and expert advice, given the unpredictable nature of the stock market.
Disclaimer: This article has been written for educational purposes only. The securities quoted are only examples and not recommendations.
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