Muhurat trading: All you need to know

This year, muhurat trading will be held on 14 November from 6:15pm to 7:15pm on the NSE as well as the BSE.

Are you wondering about the significance of muhurat trading in the stock markets? It is a special trading session conducted for about an hour on the Diwali day, which marks the beginning of Samvat, the Hindu calendar year. It is more of a symbolic ritual and investors make token purchases on this day.

This year, it will be held on 14 November from 6:15pm to 7:15pm on the NSE as well as the BSE.

Diwali as a harbinger of prosperity

There is a larger significance why the muhurat trading is held on Diwali. The festival of lights is considered auspicious for new beginnings. Traditionally, households make large purchases on this day. It is believed that buying anything on Diwali day ensures prosperity through the year. New investors, too, could take initial steps in the stock markets on this day by investing for the long term.

The second significance is that muhurat trading is about hope. It symbolises driving away the darkness of the past. We have all been through a tough Samvat 2076 when Covid, economic slowdown and market volatility disrupted lives. This muhurat trading is an opportunity for investors to make a fresh start for a prosperous new year after Diwali.

Opportunity to make quality investments

Seasoned traders normally wonder whether to buy during muhurat trading and what to buy. For those who usually invest for the short term, it is an opportune moment to make quality investments for long-term goals, such as large purchases or children’s education. Long-term investing in quality assets helps put aside money for future requirements.

A perfect way to start investing

There are plenty of stories about how a small investment in a quality stock 30 years ago has now multiplied hundreds of times. While it is not everyday that one comes across a stock such as this, but unless one makes a start, one will never get there. In India, traditions such as muhurat trading give us a reason to cultivate good habits at a time when discipline is our biggest constraint. For investors who have opened a trading account but not yet started trading, muhurat trading is an ideal occasion to do the proverbial “Shri Ganesh”.

The gift of investing to dear ones

Remember, muhurat trading is the day to make a positive start to one’s financial future. If you are planning to gift shares to your spouse or children, this can be the occasion. It is possible to gift shares to your near and dear ones by doing an off-market demat transfer to their accounts. Interestingly, gifting shares to your relatives does not even attract capital gains tax.

Every dream works best with a goal. It can be your retirement, child’s education, or down payment for your new house. Make quality investments with these goals in mind, and you will suddenly find the entire idea of muhurat trading falling into place!

Disclaimer:

The above article is purely academic in nature and aims to provide knowledge about basic trading concepts & should not be construed as an opinion or advice to invest or trade.

Investments in the securities market are subject to market risks; please read all the related documents and/or consult your investment advisor before investing.

Past performance of an investment asset does not guarantee future returns.