NSE, BSE to hold annual Diwali Muhurat trading session on November 1; details here

The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) will hold its annual Diwali Muhurat trading session on Friday, November 1, 2024, from 6:00 PM to 7:00 PM, celebrating the start of the Hindu calendar year Samvat 2081.

The session marks the start of the new Samvat, the Hindu calendar year that begins on Diwali, and it is believed that trading during the 'Muhurat,' or auspicious hour, brings prosperity and financial growth for participants.

While the market will remain closed for regular trading on Diwali, a special one-hour trading window will be available in the evening. A pre-opening session is scheduled from 5:45 PM to 6:00 PM.

Market experts note that Diwali is traditionally seen as an ideal time to begin new ventures. Investors are believed to benefit throughout the year by participating in this session, though with just one hour of trading, markets tend to be volatile. The focus may be more on the symbolic gesture than on profitability.

During this hour, trading will occur across various segments, including equity, commodity derivatives, currency derivatives, equity futures and options, and securities lending and borrowing (SLB).

Historically, investors have often enjoyed positive returns, with the BSE Sensex closing higher in 13 out of the last 17 special sessions. Despite the generally strong performance of equity indices during these sessions, trading volumes have typically been low, with fewer stocks making significant moves within the brief trading window.

An exception occurred in 2008, when the Sensex defied even the most optimistic expectations, rising by 5.86% during the one-hour session. It ended the day at 9,008, although it remained largely range-bound for the remainder of the year due to the unfolding global financial crisis.

Why is Muhurat trading important?

In India, stockbrokers regard Diwali as the beginning of their financial year. Many investors see this session as a chance to bring prosperity for the upcoming year by purchasing stocks. It also provides traders with an opportunity to diversify their portfolios and open new settlement accounts.

Although largely symbolic, Muhurat Trading typically attracts active participation, with many seasoned investors using the opportunity to adjust their portfolios. However, given its brief duration, market movements can often be volatile.

In addition to marking the new year, Muhurat Trading symbolizes optimism and growth for the upcoming business season. It fosters confidence in the stock market and embodies the spirit of prosperity for the year ahead.