Muhurat trading

Special annual Indian stock market session on Diwali

Muhurat trading is the trading activity in the Indian stock market on the occasion of Diwali (Deepawali), a big festival for citizens of India.^[1] Usually, it is held during evening hour and is announced by the stock market exchanges notifying traders and investors of the non-scheduled trading hour.^[2]^[3]^[4](dominant sect of people in Dalal Street) who do similar trading on hours of Diwali.

History

More than six decades ago, the tradition of Muhurat trading was born. It all started at the Bombay Stock Exchange (BSE) in 1957. Fast forward to 1992, and the National Stock Exchange (NSE) also embraced this auspicious practice. Since then, every Diwali has been marked by the time-honored Muhurat trading session. It's a tradition that unites the financial community in seeking prosperity and good fortune for the year ahead.^[5]

Trading activity

Stock brokers' offices take on a distinctly ethnic look with neatly designed rangoli patterns and innumerable diyas lined up to welcome Goddess Lakshmi. Muhurat trading is one of the many links the broking(trading) community retains with its rich past. The practice of Muhurat trading has been retained and observed for ages. The schedule of the muhurat trading is announced by the stock exchange and the Sensex closes on a higher note at the ending of the trading hour. With this, the traders on Dalal Street welcome the New Year on a positive note. Many start the New Year with traditional ceremonies and pujas. This tradition has been followed as a ritual for many years.

Muhurat trading is traditionally an occasion for an auspicious beginning to the traditional New Year. Investors place token orders and buy stocks for their children, which are held for the long term and sometimes never sold. Traders normally book their intraday profits, however small they may be.

Tradition

Amongst the several communities of India, the new year begins with Diwali. A puja (ritual) is performed to accounts books and safes on Dhanteras as well as on Diwali day to signify the beginning of a new year. A coin - which signifies wealth - is placed on the account books before the puja. Stock brokers perform 'Lakshmi Puja' and 'Chopda Puja' at the exchange and the customary Muhurat trading takes place. It is believed that on the night of Lakshmi Puja, the Goddess comes to reside at the place of the puja during which the traders and shopkeepers stay awake with lights burning all night.

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. An auspicious beginning is thus made on the first day of the year.

References

^ Mudgill, Amit. "Muhurat Trading: Will Sensex break the pattern and make a mark?" – via The Economic Times.
^ "Muhurat Trading Session".
^ "Unveiling the Traditions of 'Muhurat Trading'".
^ "NSE and BSE Muhurat Trading 2020 Date, Time, and Best Picks". Above Stocks. Retrieved 29 October 2020.
^ "Muhurat Trading HDFC Bank".