Diwali is considered as the new year for many households in India. As Diwali marks the beginning of the new year, purchasing a new thing on this day is considered auspicious. By continuing this belief on this day the Muhurat trading session is held in the share market in the faith that it will bring in wealth and prosperity throughout the year. Stockbrokers illuminate their offices with diyas and lamps to welcome Goddess Lakshmi; the Hindu goddess of wealth and prosperity. On this auspicious day, we decided to share some knowledge with all of you. With this intention, we have come up with a detailed blog on Muhurat trading. So let's crackle the blog to gain knowledge.
What is Muhurat Trading?
Muhurat trading is a stock market trading activity that is carried out on the day of Diwali for about an hour. Every year this special one hour is decided based on the muhurat given in the Hindu calendar. On that day the trading window in stock exchanges stays open for one hour. In India ‘Muhurat’ refers to the most auspicious time frame in a day. It is believed that trades executed on this Muhurat bring prosperity and wealth during the whole year. The trading done in this auspicious one hour of ‘Muhurat’ on the day of ‘Diwali’ is called muhurat trading.
Importance of Muhurat Trading
In India, most people believe in good omens and auspicious times to make big investment decisions like purchasing gold, buying precious ornaments and dedicating it to temples, buying a house, etc. Muhurat trading is one of those traditions. Stock market traders consider this day as a lucky day and believe that investing or trading on this day will yield good returns. The idea carried on to the trading avenue with the faithfulness that investing money in a strong company on this day will hold a benefit in the long run. Muhurat trading is a symbolic ritual that has been performed for years and investors make some token purchases on this day. It is a practice performed in a similar way with the traditions of traders who used to begin their commerce on the festival day by paying obeisance to the goddess of wealth, Lakshmi.
How is Muhurat Trading done?
Despite having a national holiday on the day of muhurat trading, the stock exchanges open the trading window for retail investors and stockbroking houses like any other weekday to place their trades and make some profit, or simply invest during a good time.
Stockbrokers start the new business year on the day of Diwali when they open new settlement accounts. Many stockbroking families, traders, and merchant communities perform the ‘Chopda Puja or Sharada puja’ to honor and worship their books of accounts.
On this day BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) open trading windows for nearly 2 hours, in which the normal session usually commences on the ‘Muhurat’ followed by a sequence - Block deal session then Pre Open, Normal Market, Call Auction Illiquid session followed by Closing Session.
History of Muhurat Trading
The tradition of Muhurat trading started in 1957 at the Bombay Stock Exchange (BSE) and in the year 1992 on the National Stock Exchange (NSE).
Things to Remember on Muhurat Trading Day
Muhurat trading is held in the Indian Stock Market only.
Unlike the weekdays when the trading session is held between 9:15 AM - 3:30 PM, the Muhurat trading window opens during the evenings on Diwali. During this one-hour markets are highly volatile, which is a great opportunity to make profits in this period.
Even though trading volume is usually very low and very few stocks move during that short duration, indices have historically ended with gains in these special trading sessions.
Make your decision based on good research before you invest in stocks. Once you have traded, we advise you to stay invested in the medium to long term to ensure that you book profits from your holdings.
Muhurat trading is also a good time to choose your financial advisor or broker to achieve your financial goals.
All the trades which got executed in the Diwali Muhurat trading session would result in settlement obligations.
Even if you are not investing during the Muhurat hour, it is necessary to keep a check on the portfolio owing to high activity levels.
Take trading decisions with a long-term vision, while token investments should be done based on experts’ advice.
Muhurat trading timing 2021
On National Stock Exchange (NSE) Muhurat Trading session for DIWALI 2021 will be as follow:
If you are planning to invest in the coming days, then why not this Diwali? With the new clothes and ornaments, bring this Diwali a new positive change to your portfolio. We wish the light of Diya lead you onto the road of growth and prosperity. Spread the joy and light up the world of others this Diwali. Have a happy, safe, and blessed Diwali!