Diwali Muhurat Trading to Take Place on November 1: Special One-Hour Session from 6 to 7 PM Announced by BSE-NSE
On the occasion of Diwali, there is a tradition of Muhurat trading in the Indian stock market. In fact, the stock exchanges are closed on this day. However, they open for a special one-hour session in the evening, known as Muhurat trading. The stock exchanges BSE and NSE will conduct a special Muhurat trading session on Friday, November 1, 2024, from 6 PM to 7 PM.
BSE and NSE announced this in separate circulars on October 20 (Sunday). The pre-opening session will take place from 5:45 PM to 6 PM. According to the Hindu calendar, this session marks the beginning of the new year, Samvat 2081, which starts with Diwali. It is believed that trading during this ‘Muhurat’ or auspicious time brings prosperity to investors.
Trading in Multiple Segments on Diwali
The stock market will remain closed for regular trading on Diwali, but a special trading window will be open for one hour in the evening. During this time, fluctuations in the markets are expected. Multiple segments, including equity, commodity derivatives, currency derivatives, equity futures and options, and securities lending and borrowing (SLB), will be available for trading within the same time slot.
Structure of the Muhurat Trading Session
The Muhurat trading session is divided into five parts:
- Block Deal Session: Two parties agree to buy/sell securities at a fixed price and notify the stock exchange.
- Pre-Open Session: During this session, the stock exchange determines the equilibrium price. This usually takes about eight minutes.
- Normal Session: This one-hour session is known as the normal session, as it accounts for the majority of the trading activity during Muhurat trading.
- Call Auction Session: This session is for trading illiquid securities. The criteria for these securities are determined by the exchange.
- Closing Session: In this session, traders/investors can place market orders at the closing price.
On regular days, the market operates from Monday to Friday, opening at 9:00 AM and closing at 3:30 PM. The pre-market session takes place from 9:00 AM to 9:15 AM, followed by the normal session until 3:30 PM.
The 68-Year Tradition of Muhurat Trading
The tradition of Muhurat trading in the stock market on Diwali is nearly 68 years old. This year marks the beginning of the Hindu Vikram Samvat 2081, starting on Diwali. The festival is regarded as the most auspicious time to welcome wealth, prosperity, and good fortune throughout India.
Similarly, there is a comparable belief associated with trading during this Muhurat. Investors in the stock market consider this day to be very special for starting their investments.
Muhurat Trading Considered Auspicious
In Hindu tradition, a Muhurat is a time when the movement of celestial bodies is believed to be favorable. Starting any activity during this auspicious time is thought to yield positive outcomes.
This is why many people in the Hindu community initiate their investments during the auspicious Muhurat trading hour on Diwali when the stock market opens for one hour. Most individuals prefer to buy shares, as they symbolize Goddess Lakshmi. According to beliefs, those who trade during this one-hour session have a better chance of earning money and achieving prosperity throughout the year.
The First Muhurat Trading Session in 1957
Muhurat trading has a history of nearly six decades. This tradition began in 1957 with the Bombay Stock Exchange (BSE) and was later adopted by the National Stock Exchange (NSE) in 1992.
At that time, there was no online trading, so traders would gather at the BSE to conduct trades during the Muhurat session. Although times have changed, the enthusiasm for Muhurat trading remains unwavering.
Last Year’s Market Performance During Muhurat Trading
During last year’s Muhurat trading session, the Sensex closed with an increase of 354.77 points (0.55%) at 65,259.45. The Nifty also saw a rise, gaining 100.20 points to close at 19,525.55.
Looking back over the past five years, from 2019 to 2023, the stock market has closed positively each year during this session. Specifically, the Sensex recorded increases of 525 points in 2022, 295 points in 2021, 195 points in 2020, and 192 points in 2019.
