The stock market will work on Sunday, November 12, 2023 for a change. It will be , for Diwali’s Muhurat Trading.
In the Indian trading circles, Diwali's Muhurat Trading, which has been going on for over 50 years now, is deemed auspicious, symbolising prosperity and good fortune throughout the year.
The practice of Diwali's Muhurat Trading started at the Bombay Stock Exchange in 1957 and was later embraced by the National Stock Exchange in 1992.
According to Hindu traditions, the worship of Goddess Laxmi on Diwali evening is considered auspicious because of planetary alignments, inspiring both seasoned and novice investors to make their moves for profitable investments.
In the stock market, the main event that day is the Muhurat Trading where most investors will try to invest in stocks expecting to hold on to them for the long term, whereas some will look for short term trades, just to mark an auspicious beginning for a prosperous year.
In the year leading up to this Diwali (as on November 10, 2023), the market has been favourable. The S&P-BSE Sensex delivered over 5.98 per cent, with the BSE Mid-cap and BSE Small-cap indices exceeding expectations at 27 per cent and 30 per cent, respectively.
The market, however, experienced a 4.4 per cent dip after reaching a new high on September 15, 2023, due to geopolitical concerns and inflationary pressures. All investors planning to engage in Muhurat trading should look for assets that have good management history and fundamentals, so that they will stand strong amid these pressures.
Sandeep Jain, market analyst and director of Tradeswift, a stockbroking firm anticipates a positive market trend this Diwali, particularly favouring small caps.
“The market is keeping a keen focus on the upcoming state elections in big states. I believes the surge will persist till next Diwali. I feel investors should keep a focus on small and mid-cap indices that offers a more accurate representation of the Indian economy. Due to weightage tilt from 7 or 8 stocks, we cannot get a true picture from the large-cap index.”
The stock markets (NSE and BSE) will open for an hour for Diwali Muhurat Trading on November 12, 2023 (Sunday). According to the notice by BSE and NSE, the symbolic trading session will be held between 6 pm and 7.15 pm. This includes a 15-minute pre-market session, the stock exchanges said in separate circulars.
Historically Muhurat Trading has mostly ended in green. In 2022, the index surged 524.5 points, making it one of the best Diwalis in recent years.
The 2021 Diwali session saw the Sensex gain 295.70 points, closing at 60,067.62, while the Nifty 50 rose by 91.8 points to 17,921. Noteworthy gainers included Kotak Mahindra Bank, L&T, and TCS.
During the trading session, 2,535 shares gained, while 514 stocks fell. Since 2018 markets were closing in green after the Muhurat Trading session.
The Diwali Muhurat Trading holds historical significance, symbolising optimism. However, investors should align stock purchasing with their risk tolerance and conduct thorough research instead of participating just because it is Diwali.
