As India gears up for the festive season, the stock markets are preparing for the annual Muhurat Trading session, a unique one-hour event held on Diwali. The stock exchanges have set the Muhurat Trading timing as 6-7.10 pm on November 1, according to the information available on the BSE website. Participants should be aware that all intraday positions will be automatically squared off 15 minutes before the session ends. This requires careful planning for those engaging in same-day trades.
Why is Muhurat trading important?
Stockbrokers in India treat Diwali as the start of their financial new year. Many investors believe that buying stocks during this session brings prosperity for the year ahead. It is also an opportunity for traders to diversify portfolios and open new settlement accounts. While it is a symbolic event, Muhurat Trading often sees active participation, with many experienced investors taking this chance to adjust their holdings. However, due to the short duration, market movements can be volatile.
During this hour, trading takes place across various segments, including equities, commodity derivatives, currency derivatives, equity futures and options, and securities lending and borrowing (SLB). Historically, investors have seen positive returns, with the BSE Sensex closing higher in 13 of the last 17 special sessions. Despite the generally strong performance of equity indices during these sessions, trading volumes have usually been low, and few stocks make significant moves within the brief window.