Muhurat Trading 2024: Embracing Tradition and Opportunity this Diwali

 As Diwali nears, the Indian stock market gears up for its annual Muhurat trading session—a one-hour evening trading window that blends tradition with finance. This year, both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) will hold their Muhurat trading on Friday, November 1, from 6:00 pm to 7:00 pm. Despite remaining closed during the day, this special evening session allows investors to make symbolic trades, honoring a centuries-old tradition that aligns with the Diwali themes of wealth and prosperity.

Why Muhurat Trading Matters

Muhurat trading, unique to India, represents an auspicious time for investments. Many investors view it as a chance to invite prosperity into their financial lives, often with token investments marking the start of a positive financial journey. Over the years, this session has frequently delivered positive returns, with 13 out of the past 16 years showing gains, highlighting the favorable sentiment surrounding Diwali in the markets.

Last Year's Success and Historic Trends

In the 2023 Muhurat trading session, the BSE Sensex closed up 355 points, a 0.55% rise, while the Nifty50 gained 100 points, closing 0.52% higher. Mid- and small-cap stocks outperformed, with the BSE Midcap index rising 0.67% and the BSE Smallcap index climbing by 1.14%. Gains across the board boosted investor confidence, with market capitalization adding approximately ₹2.2 lakh crore. Prominent gainers included Coal India, UPL, Infosys, and Eicher Motors, underscoring broad-based strength during the session.

Historically, Muhurat trading has yielded positive returns. For instance, the indices rose by around 1% in 2022, 0.5% in 2021, and 0.47% in 2020. While minor declines have occurred, the trend generally favors gains, with notable exceptions like the 6% jump during the global financial crisis in 2008, which marked the highest gain ever recorded on Muhurat trading day.

Strategic Insights for Samvat 2081

The year Samvat 2081 begins amid significant global economic shifts, with analysts viewing potential market dips as opportunities. According to Pranav Haridasan, MD and CEO of Axis Securities, the current environment—marked by the US Federal Reserve’s recent 50 basis points rate cut and potential further cuts—presents both challenges and opportunities. In contrast, the Reserve Bank of India’s neutral stance amid inflationary pressures adds an interesting dynamic. Haridasan emphasizes that a focus on corporate earnings and a balanced approach to stock selection will be crucial as Samvat 2081 unfolds.

Tips for Investors: Make the Most of Muhurat Trading

While the festive sentiment may inspire, experts suggest a cautious approach for Muhurat trading due to limited liquidity during the session. Beginners are encouraged to start with token investments and consult a financial advisor to ensure informed decisions. Investors looking at long-term gains should prioritize quality stocks with growth potential and reasonable valuations, setting a foundation for financial growth in the coming year.

Embracing Prosperity and Optimism

Muhurat trading represents more than just an opportunity for financial gain; it’s a celebration of optimism, prosperity, and cultural heritage. As we welcome Diwali, this tradition allows investors to symbolically begin the year on a positive note, embodying the spirit of wealth and well-being that Diwali brings to millions of households.

This year’s Muhurat trading session promises not just to carry forward a long-standing tradition but to offer meaningful opportunities amid evolving market conditions, making it an exciting time for both new and seasoned investors.