Before we answer the question, what is Muhurat trading meaning, let’s look at the term Muhurat. The word ‘Muhurat’ means an auspicious time. In Hindu customs, Muhurat is a time when planets are aligned favorably to ensure positive results.
Muhurat Trading is a common ritual followed by the traders in India. This is a one-hour time that is considered auspicious on the day of Diwali for investing in shares. The stock exchange specifies the time of Muhurat trading every year.
According to beliefs, people trading during this one hour have a better chance of earning wealth and gaining prosperity throughout the year. Typically, this period is during the evening of Diwali and most people prefer buying stocks as a token of Goddess Lakshmi. This is unique to the Indian stock market only.
Muhurat Trading Timings 2023
Event and Time
Pre-Open Session
6:00 PM - 6:08 PM IST
Muhurat Trading
6:15 PM - 7:15 PM IST
Post-close
7:30 - 7:38 PM IST
Market Close
7:40 PM IST
Muhurat trading History and origin
The roots of muhurat trading can be traced back to ancient India. It's believed that King Vikramaditya started this practice. He believed that commencing Diwali muhurat trading would bring prosperity to his kingdom. Over time, it evolved into a cherished custom among traders.
Muhurat trading received official recognition in the Indian stock market during the 20th century. The Bombay Stock Exchange (BSE) was among the first to adopt this tradition in 1957, and it was later embraced by the National Stock Exchange (NSE).
As online trading was not the norm then, traders would gather physically at the stock exchange during this auspicious hour to initiate their trades.
Muhurat trading How does it work
India's major stock exchanges, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), annually conduct Diwali muhurat trading.
The stock market remains closed throughout Diwali, and only a special one-hour window is opened for Diwali muhurat trading, permitting traders to make auspicious trades.
The muhurat trading time lasts for about an hour. It's divided into multiple slots, each dedicated to specific market segments. These segments include stocks, derivatives, commodities, and more.
Traders often begin Diwali muhurat trading with various religious rituals and prayers. During muhurat trading timing, traders can buy and sell stocks, starting afresh in their financial journey.
With the advent of technology, muhurat trading is not restricted to physical trading floors. Online trading platforms now allow traders and investors to participate from the comfort of their own homes.
Muhurat Trading Historical Sensex performance
A significant aspect of muhurat trading is its impact on the Sensex, India's benchmark stock index. The performance of Sensex during Diwali muhurat trading is closely watched and interpreted as an omen for the upcoming year.
Historically, muhurat trading has often set a positive tone for the market, bringing in good luck and substantial gains for investors. It is not uncommon for a bullish trend to persist in the following trading days and months.
Over the years, the Sensex's performance during Diwali muhurat trading has shown a mix of gains and losses. Notable trends include a significant surge in 2008 (5.9 percent) and consecutive years of decline in 2016 (-0.4 percent) and 2017 (-0.6 percent). On the positive side, 2018 (0.7%) and the more recent years, 2019 (0.49 percent), 2020 (0.45 percent), 2021 (0.49 percent) and 2022 (0.88%), have seen positive gains, suggesting a more optimistic outlook during these sessions.
Frequently asked questions
1. Is intraday trading allowed in muhurat trading? Can we trade in F&O during muhurat trading?
Intraday trading is typically allowed during muhurat trading, as it follows the regular trading rules and is subject to the market's regulations. However, you must check with your specific broker and the stock exchange for any guidelines or restrictions that may apply during the muhurat trading session.
2. Can we trade in F&O during muhurat trading?
Yes, you can trade in Futures and Options (F&O) during muhurat trading. It's one of the segments available for trading during this special session, allowing investors and traders to engage in derivative transactions as part of the overall muhurat trading experience.
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