Muhurta trading is a tradition in the Indian stock market on the occasion of Diwali. Actually on this day there is a holiday in the stock exchange. But even on holidays it is opened especially for one hour in the evening, which is called Muhurta trading. Stock exchanges BSE and NSE will conduct a one-hour special muhurat trading session on Friday, November 1, 2024 from 6 PM to 7 PM.
BSE-NSE has announced this in separate circulars on October 20 (Sunday). The pre-opening session will be from 5.45 pm to 6 pm. According to the Hindu calendar year, this session begins the new Samvat 2081, which begins on Diwali. It is believed that trading during 'muhurta' or auspicious times brings prosperity to investors.
There will be trading in multiple segments such as equity-commodity derivatives
The stock market will be closed for regular trading on Diwali, but a special trading window will be open for one hour in the evening. In such a situation, fluctuations are seen in the markets. Multiple segments like Equity, Commodity Derivatives, Currency Derivatives, Equity Futures and Options and Securities Lending and Borrowing (SLB) will be traded in a single time slot.
A Muhurta trading session is divided into 5 parts
- Block Deal Session: Two parties agree to buy/sell the security at a fixed price and report it to the stock exchange.
- Pre-Open Session: In this session the stock exchange determines the equilibrium price. This usually takes about eight minutes.
- General Session: In muhurta trading this session is of one hour. It is called a normal session because most of the trading takes place in it.
- Call the auction session: Illiquid securities are traded. The criteria for these securities are set by the exchange.
- Closed Session: In this, traders/investors can place market orders at the closing price.
On normal days the market opens from 9:00 AM to 3:30 PM Monday to Friday. Pre market session is from 9:00 to 9:15. followed by General Session till 3:30 p.m.
The tradition of Muhurta trade is about 68 years old
The tradition of Muhurta trading on Diwali in the stock market is almost 68 years old. This year Hindu Vikram Samvat 2081 is starting from Diwali day. All over India this festival is considered the most auspicious time to welcome wealth, prosperity and good fortune. Similarly, a similar concept is associated with the trade of this muhurta. Stock market investors consider this day very special to start investing.
Muhurta trade is considered auspicious
In Hindu tradition, a muhurta is a time when the motion of the planets is considered auspicious. Starting any work during an auspicious time brings positive results.
That is why on the auspicious occasion of Diwali, when the stock market opens for an hour, many Hindus begin their investments. Most of the people prefer to buy shares as they symbolize Goddess Lakshmi. According to beliefs, people who trade during this hour have a better chance of making money and achieving prosperity throughout the year.
The first Muhurta trade took place in 1957
Muhurta Trading has a history of almost six decades. This tradition started in 1957 with the Bombay Stock Exchange. Later it was adopted by the National Stock Exchange in 1992. There was no online trading at that time. Therefore, during muhurta trading, traders used to gather to trade in BSE. Though times have changed now, the spirit of Muhurta trade remains intact.
Last year the market closed with a gain of 354 points
Last year, the Sensex closed at 65,259.45 with a gain of 354.77 points (0.55%) in the late trading session. The Nifty also gained 100.20 points to close at 19,525.55. If we talk about the last 5 years i.e. 2019 to 2023, the stock market has closed with gains every time. The Sensex closed the year with gains of 525 points in 2022, 295 points in 2021, 195 points in 2020 and 192 points in 2019.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
