Diwali, the Festival of Lights, holds a special place in the hearts of millions across India. Beyond the traditional celebrations and vibrant festivities, Diwali also marks a unique event for the financial world – Muhurat Trading. This special trading session, laden with cultural significance, is eagerly awaited by investors and traders alike.
As the Bombay Stock Exchange (BSE) unveils the timings for Muhurat Trading on November 12, 2023, let’s delve into the nuances of this auspicious occasion and explore how it blends Indian sentiments with financial aspirations.
The Timing and Tradition for Muhurat Trading on Diwali 2023:
Timing for Muhurat trading has been announced by the Bombay Stock Exchange. It is going to be held between 6 pm and 7:15 pm IST on November 12, Sunday. During Diwali, the exchanges are open only for one hour, where traders punch in token trades to mark the start of the new year.
The Significance of Muhurat Trading:
Muhurat Trading is considered significant as investors see it as an opportunity to begin their investment journey on an optimistic note and add new stocks to their portfolios. They also increase their holdings in existing stocks.
In the past two Muhurat sessions, stock markets have closed in the green on this day, as Sensex and Nifty gained 0.88 percent each on the Muhurat Trading in 2022, and the two indices moved up by 0.49 percent each in 2021. History suggests the day hardly disappointed investors, with the BSE Sensex closing higher in 7 of the last 10 such special sessions.
What Happens in Muhurat Trading:
The Muhurat Trading session is a well-structured event that unfolds in various stages. It includes a pre-open session, a period for determining equilibrium prices, the main one-hour trading session, a segment for trading illiquid securities, and a post-close session for settling trades. On Diwali, both the NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) permit trading for a limited time.
Typically, the session is divided into the following parts:
🟢 Block-Deal Session: where two parties agree to buy/sell a security at a fixed price and inform the stock exchange about it
🟢 Pre-Open Session: where the stock exchange determines the equilibrium price (usually around eight minutes)
🟢 Trading Session: the one-hour session where most trading takes place
🟢 Call Auction Session: where illiquid securities are traded. Security is termed illiquid if it satisfies the criteria set by the exchange.
🟢 Market Closing Session: where traders/investors can place a market order at the closing price
Muhurat Trading Timings for Diwali 2023
Here is a quick look at the Muhurat Trading time, 2023 for both BSE and NSE:
🔹 Pre-Open Session: 6:00 PM – 6:08 PM IST
🔹 Muhurat Trading: 6:15 PM – 7:15 PM IST
🔹 Post-Close Session: 7:30 PM – 7:38 PM IST
🔹 Market Close: 7:40 PM IST
Who Can Benefit from Muhurat Trading?
The Muhurat trading Session is a good time to buy or sell stocks since the trading volumes are high. Also, usually, the market is bullish since the festive spirit focused on prosperity and wealth drives people to be optimistic about the economy and the stock markets. Hence, it is a good time for both investors and traders, experienced and new, to benefit from the Muhurat trading session.
Things to Keep in Mind Before Indulging in Muhurat Trading:
Here are some aspects that you must keep in mind before you start buying or selling stocks during the Diwali day trading time (Muhurat Trading).
🔹 Settlement Obligations: All open positions at the end of the trading session will result in settlement obligations.
🔹 Resistance and Support Levels: Traders must closely monitor resistance and support levels as markets can be volatile with no specific direction during the session.
🔹 Stick to Fundamentals: Amidst the excitement, it’s vital to stick to the fundamentals of a company before investing for the long term. Rumours may spread fast, but wise investors stay grounded in the basics.
🔹 Choose Stocks Wisely: If aiming to profit from volatility, opt for stocks with good trading volumes, given the limited one-hour trading window.
🔹 No Guarantee of Returns: Investing during this period does not guarantee returns. While a stock’s performance on Diwali may be promising, future outcomes depend on fundamentals and macroeconomic factors. Invest smartly.
As the Muhurat Trading session approaches Diwali 2023, investors and traders prepare to participate in this unique blend of tradition and finance. The one-hour window symbolises new beginnings and financial prosperity, aligning with the spirit of Diwali. But remember, the Muhurat Trading waters require a blend of strategy, awareness, and a touch of festive optimism.
At Rurash Financials we wish that this Diwali brings not just the glow of lights but also the shine of financial success.
🎆 Happy investing and a very happy Diwali!💫
Embark on a journey of financial prosperity with Rurash Financials where our expertise can lead you to the path to sound investments and strategic financial planning.