As we get ready for Muhurat Trading on the NSE and the BSE on 04-November-2021, let us look back at the history of Muhurat Trading, its significance for markets and some important facts for this year.
A brief history of Muhurat Trading in India
The first Muhurat Trading on the BSE was conducted in the year 1957, so there is a good 64 year history to Muhurat Trading in India. On the NSE, Muhurat Trading has been conducted since 1992, although the exchange officially commenced operations only in 1994. Muhurat Trading is a symbolic 1-hour trading on the day of Diwali to seek the blessings of Goddess Lakshmi, which is why this festival is also popularly called Lakshmi Pujan.
While Goddess Lakshmi in the Hindu Pantheon is equated with wealth, she actually embodies the much broader concept of prosperity and well-being. It is believed that Goddess Lakshmi is averse to dirt and darkness. That is why she is welcomed on the day of Diwali by cleaning up homes, cleaning offices and illuminating with bright lights.
For the large Gujarati and Marwari community that has dominated the stock market as brokers and investors, Muhurat Trading has a special significance. It also marks the start of a new Samvat Year. The beginning of the Samvat approximately corresponds to the year 57 BCE, which is why the Samvat year is always 57 years ahead of the Gregorian calendar. On 04-November 2021, we will welcome Samvat 2078 in all its grandeur and splendour.
Is trading on Muhurat Trading day profitable?
There is no empirical evidence of that, but Muhurat Trading has a larger significance. For example, equity has long been the asset class that outperforms other assets over the long term. However, equities are risky and hence most investors tend to be lethargic about taking the decision to invest in equities. Muhurat Trading is a sentimental occasion for people to invest in equities and get convinced about the power of equities. After all, when it comes to equities, there is nothing like experiencing the real thing.
Normally, brokers, investors and institutions avoid selling heavily on Muhurat Trading and that keeps the markets generally robust on Muhurat Trading. The best Muhurat Trading was in 2008, when the Nifty gained 5.8% on Muhurat Trading day, in the midst of the Lehman crisis. Last year, on Muhurat Trading day, Nifty closed at 12,780. Since the last Muhurat Trading, the Nifty has gained over 40%, which is an amazing return on an index over a period of 1 year.
However, just a word on the axiom that trading on Muhurat Trading Day is bound to be positive. You will still have to do your homework, your stock research and do due diligence before buying a stock on Muhurat Trading. If you are a first time investor, you can even buy the index via index ETFs. The reality is that Muhurat Trading is a powerful reminder about the wealth creating capacity of equities and also the importance of starting your investment journey right away.
Muhurat Trading 2021
The table below captures the key timings pertaining to the Muhurat Trading on 04-November 2021.
|Trading Session Detail||Timings on BSE and NSE|
|Block Deals Session||5.45 PM to 6.00 PM|
|Pre-open Muhurat Session||6.00 PM to 6.08 PM|
|Actual Muhurat Trading||6.15 PM to 7.15 PM|
|Post-Closing Muhurat||7.25 PM to 7.30 PM|
|Call Auction – Illiquid Session||6.20 Pm to 7.05 PM|
As mentioned earlier, the Muhurat Trading is an auspicious time that is determined by the astrologers based on the positioning of the stars and planets. From an investor perspective, the Muhurat Trading is intended to encourage investors to get the long term benefits of investing in equities. It also underlines that your investment journey has to begin right now.