What is Muhurat Trading?
Muhurat trading is a unique, symbolic trading session held by Indian stock exchanges during the festival of Diwali, celebrating the beginning of a new financial year for traders and investors. The word “muhurat” translates to “auspicious time,” and this session typically lasts for about an hour on Diwali evening, marked by positive sentiment and a festive atmosphere. Muhurat trading is not only about the potential for financial gain but also about embracing prosperity and good fortune.
What is Muhurat Trading 2024 Date & Time
The stock exchanges, NSE and BSE, will hold their annual Diwali Muhurat trading session on Friday, November 1, 2024, from 6:00 PM to 7:00 PM. This special trading session marks the beginning of the Hindu calendar year, Samvat 2081.While the regular stock market will be closed on Diwali, this one-hour evening session allows investors to participate in auspicious trading. The pre-opening session will will be conducted from 5:45 pm-6:00 pm on November 1, 2024.
Why is Muhurat Trading Significant?
Auspicious Beginning: Diwali holds cultural and spiritual significance in India as it symbolizes the triumph of light over darkness. Muhurat trading embodies this spirit by encouraging people to start the new financial year with positive intentions and fresh investment plans.
Tradition Meets Finance: Rooted in ancient Hindu tradition, many traders and investors consider it a ritualistic start to a profitable year. This practice has been around for decades and continues to be observed by investors who blend tradition with modern financial pursuits.
Symbolic Gains and Celebrations: Though trading volumes during this session are typically lower, there’s a widespread belief that any small investment made during this period will bring good fortune throughout the year. Brokers and investors often buy select shares as a symbolic gesture rather than for short-term gains.
Key Elements of Muhurat Trading
Session Timing: Muhurat trading usually takes place in the evening, following the Laxmi Puja (worship of Goddess Lakshmi) in the Hindu festival calendar. Both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) announce the exact timings each year.
Market Sentiment: The mood during Muhurat trading is often bullish. Historically, the market witnesses a rise in stock prices and a generally optimistic sentiment as traders focus on making positive trades to mark the new beginning.
Short Trading Window: Muhurat trading is open for only one hour. Despite its brief duration, it includes all usual phases of trading, such as pre-opening, opening, and closing sessions.
Ritualistic Investments: Many investors, especially retail traders, prefer to buy shares in blue-chip companies during this time as a token of luck. Additionally, brokers and traders often gather with their families at their offices or homes to witness the session, making it a family-oriented celebration in the finance world.
How to Approach Muhurat Trading ?
Plan Investments Carefully: As Muhurat trading typically sees a sharp rise in trading prices due to positive sentiment, it’s essential to invest wisely rather than impulsively. While the event is a celebration, financial planning should remain central.
Select Blue-Chip or Value Stocks: Many investors focus on blue-chip or fundamentally strong stocks that align with their long-term strategy. This tradition is often about stability, so solid, reliable stocks are popular choices.
Stick to the Portfolio Strategy: Although the atmosphere is festive, experienced investors recommend sticking to one’s usual investment principles and not making risky trades in the spirit of celebration. It’s about adding value rather than taking risks.
Advantages and Disadvantages of Muhurat Trading
Advantages:
Positive Start to the Financial Year: Provides an optimistic outlook to kickstart the trading year.
Tradition-Driven Investment: Gives a sense of cultural connection and continuity to investors, blending sentiment with finance.
Special Opportunity for New Investors: A festive occasion for beginners to step into the stock market.
Disadvantages:
Limited Trading Volume: The volume of trading is usually lower, so price movements may not be reliable indicators for future performance.
Market Volatility: The festive mood can sometimes lead to exaggerated price surges, which might not reflect actual market conditions.
Short Trading Window: The brief session doesn’t allow for much analysis or in-depth trading.
