The National Stock Exchange (NSE) has announced its annual Muhurat trading session, which will take place on Friday, November 1, 2024, from 6:00 PM to 7:00 PM. This marks the beginning of the Hindu calendar year, Samvat 2081.
Though regular trading will be suspended for Diwali, the NSE will conduct a special one-hour trading session in the evening. Prior to this, there will be a pre-opening session from 5:45 PM to 6:00 PM, leading up to the main trading window.
Significance of Muhurat Trading
Muhurat trading is deeply rooted in tradition, aligning with auspicious planetary positions that mark a fresh start for businesses. Investors see this one-hour session as an ideal time to make new financial commitments, taking advantage of the favorable energy surrounding the Diwali festival.
Historically, Muhurat trading sessions have often yielded positive results. For instance, the BSE Sensex has closed with gains in 13 of the last 17 such sessions. Although trading volumes during Muhurat trading are typically lower than usual, some years have seen unexpectedly high returns.
A prime example is the 2008 session, where despite the global financial crisis, the Sensex jumped by 5.86% during Muhurat trading.
Since 2012, the Sensex has posted gains in 9 out of 12 Muhurat sessions. The most recent session, held on November 12, 2023, saw the index rise by 355 points, equivalent to a 0.55% increase. However, the period following Muhurat trading has not always been as favorable, with the Sensex experiencing declines in 7 of the past 11 years.
Why Muhurat Trading is Important
For both investors and brokers, Muhurat trading represents the financial new year, symbolizing hope and growth. Many believe that participating in this session brings prosperity, and it is seen as an opportune moment to diversify portfolios and open new settlement accounts. The session reflects the optimism and renewed confidence investors have for the coming year.
However, participants must be mindful of the session’s short duration and potential market volatility. Intraday positions will be automatically squared off 15 minutes before the market closes, requiring careful planning and precise timing.
For long-term investors, Muhurat trading offers an opportunity to start new investments or adjust portfolios, while the festive atmosphere adds an element of excitement to this unique stock market tradition.
