Diwali Muhurat Trading is a special one-hour trading session on the Indian stock exchanges that takes place during the festival of Diwali. Traditionally seen as a lucky time for investments, the session is viewed as a fresh start in the Hindu calendar, symbolizing prosperity and growth. This year, the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and Multi Commodity Exchange (MCX) will observe the Muhurat Trading session on Friday, November 1, 2024.
Significance of Muhurat Trading
Muhurat trading, a long-standing tradition in Indian stock markets, is held in the evening during Diwali or on the day of Laxmi Pujan. Investors make symbolic purchases in this session, celebrating the start of a new Hindu calendar year, called Samvat. Many believe that investments made during this time will bring good fortune and positive returns throughout the year. The Diwali 2024 session marks the beginning of Samvat 2081.
According to market analysts, this Samvat year is significant for global and Indian economies. Last month, the US Federal Reserve reduced interest rates by 50 basis points to 5%, with further cuts expected, setting a global trend. In India, while the Reserve Bank of India (RBI) recently kept rates stable, a shift to a neutral policy stance has opened the door for potential rate reductions in the coming year.
2024 Muhurat Trading Timings
The Muhurat Trading session on November 1, 2024, will begin at 6 PM and end at 7 PM on the NSE, BSE, and MCX. The session offers a specific cut-off time for position limits and trade adjustments, set to close at 7:10 PM. Once this time is reached, no new trades or adjustments can be made.
Due to the special trading session, settlements for trades conducted on October 31 and November 1 will be completed on November 4, 2024, at 8:30 AM.
Expected Market Returns and Past Performance
Historically, Muhurat Trading sessions have shown positive returns, with eight out of the last ten sessions resulting in gains. Investors follow these returns as a tradition, and for the past decade, the benchmark indices Sensex and Nifty 50 have recorded annual Muhurat-to-Muhurat returns averaging between 11-13%. While the actual Diwali trading day often shows modest gains of 0.5-1%, the overall sentiment remains optimistic.
Analysts recommend a careful approach in stock selection this year, considering factors like growth, quality, and reasonable pricing as key to maximizing returns in Samvat 2081.
