Usually, this trading session is held in the evening and most traders buy on this day. It is a symbolic ritual that has been performed for years and investors make some token purchases on this day. It is a practice that is in line with the traditions of traders who used to begin their commerce on the festival day by paying obeisance to the goddess of wealth, Lakshmi.
As Diwali also marks the beginning of the New Year, it is believed that Muhurat trading on this day brings in wealth and prosperity throughout the year. The traders on Dalal Street welcome the New Year on a positive note.
The offices of stockbrokers are illuminated with diyas and lamps to welcome Goddess Lakshmi, the Hindu goddess of wealth and prosperity. The time of the Muhurat trading is specified by the national stock exchanges—Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Muhurat trading was started in 1957 on the BSE and in 1992 on the NSE.
According to the Hindu calendar year this year, Diwali is falling on Thursday i.e. November 4, 2021, with Samvat 2078. It is believed that Muhurat trading brings prosperity and wealth throughout the year.
If you take a look on the past performance of indices which have historically ended with gains in these special trading sessions. Although trading volume is usually very low and few stocks move during that short duration.
Along with the stock exchanges, commodity exchanges also have Mahurat trading for investors. For the business community, the new financial year begins with Diwali as they perform the 'Chopda or Sharda Puja' where old account books or ledgers are closed and new one’s open marking the start of a promising new business year.
Whether veteran investors or newcomers, do remember to base your decision on sound research before you invest in stocks. Once you have traded, remember to stay invested in the medium to long term to ensure that you book profits from your holdings.
This is also an extremely good time to choose your financial advisor or broker to better discipline and achieve your financial goals. However, do pay heed to his advice to make the most of what the Indian markets have to offer.
This year, the stock market will conduct the customary one-hour special ‘Muhurat’ trading between 6:15 pm and 7:15 pm on November 4.
A block deal session will run from 5.45 pm till 6 pm and the pre-open session will take place between 6 pm and 6:08 pm said the exchanges. All trades executed in the Diwali Muhurat trading session would result in settlement obligations.
So even if you were to choose not to invest during the Muhurat hour, it is essential to keep a check on the portfolio owing to high activity levels. And therefore, decisions need to be taken with a long-term vision, while token investments are encouraged based on experts’ advice.
So if you plan is to begin investing one day, then why not start this Diwali.