The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are set to light up Dalal Street with a special Muhurat trading session.

The special trading session, occurring on the auspicious occasion of Diwali, will run from 6:00 PM to 7:15 PM, allowing investors to participate in the market’s festivities.

Read More

What is Muhurat Trading?

Muhurat trading is a revered tradition in India where stock exchanges open for a one-hour trading session on Diwali, considered an auspicious time to invest in stocks.

Investors believe that trading during this ‘muhurat’ or auspicious hour brings prosperity and financial growth, setting the tone for a profitable year ahead. All trades executed during this session are settled on the same day during the 15-minute pre-opening and closing sessions.

In 2022 and 2021, the Sensex and Nifty each gained approximately 0.88 per cent and 0.49 per cent, respectively, during the Muhurat trading sessions, providing a promising backdrop for this year’s event.

What can you invest in?

During Muhurat trading, various trading windows will open across market segments. Investors can engage in trading equity, commodity derivatives, currency derivatives, equity futures and options (F&O), and securities lending & borrowing (SLB) within the same time slot.

Strategy for Muhurat Trading

Market experts advise investors to approach Muhurat trading with caution and a long-term perspective.

While the occasion may seem like an opportunity for quick gains, it’s important to exercise prudence. Due to limited liquidity on this day, it’s advisable not to buy or sell large quantities.

New investors can start by making token investments in stocks of interest. Consulting a financial advisor is recommended for those unsure of where to invest.

Harjeet Singh Arora, Managing Director at Mastertrust, highlights that seven out of the past ten Muhurat trading sessions concluded with positive returns, emphasising the auspicious nature of this occasion for market participants.

“Meticulous planning is imperative, particularly within the short time frame of Muhurat trading. We have to clearly outline our financial goals whether we are looking for short-term gains or long-term investments,” Arora said.

“Usually, we witness volatile trading sessions hence thorough research is very important before deploying any trade. Look for companies with strong fundamentals, positive earnings reports, and growth potential. Additionally, we can also find stocks based on technical studies for short-term trading opportunities,” he noted.

“However, given the short duration of muhurat trading, liquidity is also a big factor. Especially for intraday traders, choose stocks with sufficient liquidity to ensure smooth execution of trades,” Arora added.

Meanwhile, Manoj Dalmia of Proficient Group of Companies advises maintaining a long-term perspective, avoiding overreliance on stock tips, and being mindful of potential price volatility.

Samvat 2080 outlook

Samvat 2080 holds special significance in the Indian stock market as it marks the beginning of a new Hindu year and a fresh start for investors.

The bullish momentum in the market is supported by strong corporate performance, robust domestic economic numbers, and expectations of a return of pro-business policies. Increased foreign direct investment (FDI) in India and the conclusion of the US Federal Reserve’s rate hike cycle further bolster the positive market outlook.

Sunil Nyati, Managing Director of Swastika Investmart Ltd, said, “With the Indian elections looming and an impending peak in the interest rate environment in the US, the outlook for the Indian equity markets is positive. It is expected that gold and equities will both perform well in the coming months, with gold that might further benefit from the anticipated economic slowdown in the US in 2024.”

“My preferred choice for investment leans heavily toward Indian equities as the favored asset class, the Indian equity markets are poised to outshine not only gold but also other global markets,” he added.

Meanwhile, Harjeet Singh Arora of Mastertrust, said, “In light of mounting fundamental tailwinds, the market is poised to sustain its prevailing bullish momentum into Vikram Samvat 2080. Renowned global banks and financial institutions have clearly expressed optimism towards the Indian market. The stage of a bullish scenario is being set by strong corporate performance, overwhelming domestic economic numbers, and growing expectations of the return of the Modi government, known for its pro-business policies.”

“Investment in equity and gold should depend on your investment objective, time horizon, and risk profile, but proper asset allocation is required in the portfolio. Gold has been considered a safe-haven asset and used as a hedge against inflation. Gold should be viewed as a long-term investment option rather than a short-term investment. Equity markets have remained volatile both in India and globally but outperformed against other asset class,” he added.

“One should invest in equity from a long-term investment perspective, the equity market can deliver a phenomenal return. Ideally, you should diversify investments in sync with your risk appetite and your original investment plan that you have made for achieving your short and long-term financial goals.”

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)