Indian Stock exchanges -both the Bombay Stock Exchange and National Stock Exchange conducted the once-in-a-year Diwali Muhurat trading on Monday as Diwali marked the beginning of the Hindu accounting calendar year Samvat 2079. The market stays locked for normal trading to mark Diwali, the special trading window remains open for just one hour in the evening. This tradition started with the first-ever traders in the country.
A typical muhurat trade starts when a puja is performed, new accounts are opened and new shares are bought on Diwali. It starts off the Hindu New Year. The timing of the muhurat starts with the pre-opening session conducted from 6 pm-6.15 pm followed by a one-hour trading session between 6.15-7.15.
It is said that this marks the new year on the right note. This trading has a flip side also because it is highly unstable during this session. The Muhurat trading session is an outstanding time to buy or sell stocks since the trading numbers are high. This year Nifty50 crossed the 17,700 mark, ending 0.9% higher at 17,738 points. Its BSE counterpart Sensex topped 59,900 and tested a high of 59,994.25, before ending 0.9% higher at 59,832 points.
While explaining this Muhurat session Dr VK Vijayakumar who is the Chief Investment Strategist at Geojit Financial Services also gave his views forward saying, "Muhurat trading will be lit up by fireworks from the bulls that are set to charge with the support from the mother market in the US which was strong last Friday. Financials are again likely to lead the rally since credit growth in the economy is robust and continues to gain momentum. However, investors should be cautious since there are major challenges ahead, particularly rising interest rates and the unknown trajectory of the Ukraine war".
The Importance of the Muhurat
On this day traders retain the age-old tradition of executing trades in the special one-hour session, whose timings are decided based on planetary positions, as it is deemed auspicious to start new business activity in the light of diyas and amid colours of rangoli patterns. It is customary for stock brokers to perform Lakshmi Puja at the exchange and then the Muhurat trading takes place. It is believed that Goddess Lakshmi comes and resides at the location of puja which is why traders and shopkeepers stay awake with all decorative lights
According to records it hardly disappoints any Investors, with the BSE Sensex closing higher in 11 of the last 15 such special sessions. Since 2012, the Sensex has shut down in the green zone 7 out of 10 times. On November 4, 2021, the index had advanced 295.7 points or 0.49%.
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