Muhurat Trading 2024: Date, Time & Other Details

India’s rich culture influences every part of life, including decisions like buying a TV or car or planning a housewarming. People often look for the right “muhurat” for such occasions. This tradition also extends to traders and investors, who eagerly participate in Muhurat Trading on Diwali each year. With Diwali around the corner, excitement for Muhurat Trading 2024 is already building among traders and investors. But how is Muhurat Trading different from a regular trading day? What’s the significance behind it, and how did it all begin? Let’s explore the details of Muhurat Trading.

What is Muhurat Trading?

Muhurat Trading is a special one-hour trading session in the Indian stock market, held during Diwali on Laxmi Puja Day. It’s seen as an opportunity to bring prosperity into your financial life, as many believe buying stocks, mutual funds, gold, or other valuables on this day invites the blessings of Laxmi.

Muhurat Trading Date & Time

The stock exchange sets the Muhurat Trading time every year. In 2024, it will be observed on November 1st  from 6.15 pm to 7.15 pm. Anyone with a trading account through a registered stockbroker can take part. This tradition dates back to traders who started their business on Diwali by honoring Lakshmi, the goddess of wealth. In the investing world, it also marks the beginning of a new Samvat, the Hindu calendar year that starts with Diwali.

Nifty During Muhurat Trading 2023

Let’s put this into perspective. Nifty has grown at a compound annual growth rate (CAGR) of 11.76% between 2013 and 2023. So, if you had invested Rs. 10 lakhs on the Muhurat Trading Day in 2013, your investments would have been worth Rs. 30.44 lakhs in 2023.

Stock Market during Muhurat Trading

Muhurat trading on Diwali usually brings a positive vibe to the Indian stock markets, which aligns with the festive mood. Historically, key indices like the Sensex and Nifty often close in the green during this special session. Over the past decade, the Sensex has ended higher on seven occasions, with average gains between 0.7% and 1%. There have been years with slight declines, though. In 2022, the Sensex saw a small gain of about 0.8%; in 2021, it dipped slightly by 0.1%. A standout year was 2008, when the indices jumped nearly 6% despite the global financial crisis. 

In the last ten years, the movement of indices during Muhurat trading has been as follows- 

Year	NIFTY Change (%)	SENSEX Change (%)
2023	0.52	0.55
2022	0.88	0.8
2021	0.5	-0.1
2020	0.47	0.5
2019	0.37	0.7
2018	0.7	0.7
2017	-0.6	-0.6
2016	-0.04	-0.04
2015	0.5	0.48
2014	0.2	0.24
2013	0.2	0.2

Over the years, the broader market has shown resilience during this one-hour session. The occasion often sees a surge in buying activity, and optimism generally boosts trading volumes, creating a favorable environment for short-term gains. Midcap and small-cap stocks also tend to see increased action due to the upbeat market sentiment. However, Muhurat trading’s positive streak isn’t a given. External factors, such as global market trends, economic data, or geopolitical events, can still impact the outcome. 

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How did the Mahurat Trading tradition start?

Traditionally, stockbrokers in India start their new year on Diwali, opening new settlement accounts for clients during the auspicious Muhurat. Muhurat trading, a practice dating back to 1957 on the Bombay Stock Exchange, is over half a century old. In those days, there was no online trading; traders would gather on the trading floor in festive attire to trade during this special hour, believing it would please Goddess Lakshmi.

On Diwali, the investors and traders also perform Chopda Pujan, worshipping their books of accounts. Various beliefs surrounded Muhurat trading, with one common idea being that Marwari traders typically sold stocks during the Muhurat, as they preferred not to bring money into the house on Diwali. Meanwhile, Gujarati traders were known for buying shares during this time. Although no data supports this belief, it doesn’t hold much significance today.

Nowadays, Diwali Muhurat trading is more symbolic than cultural. Investors see it as an auspicious time, with most Hindu investors performing Lakshmi Pujan (prayer to Goddess Lakshmi) before purchasing shares of solid companies that they hope will yield good long-term returns. This enduring tradition highlights the connection between culture and financial markets and is usually marked by high trading volumes and enthusiastic participation.

How does Muhurat Trading work?

The one-hour window is divided as follows-

• The block deal session runs for 15 minutes before retail investors enter the market. Here, the two parties agree on a fixed price for a security and inform the exchange about the deal.  
• Next is the pre-open session, lasting 8 minutes, where the exchange figures out the equilibrium price.  
• The normal market session follows, lasting an hour, where most of the day’s trades happen.  
• After that, there’s a call auction session for 5 to 10 minutes, where less-traded or illiquid securities are dealt with.  
• Finally, the session wraps up with a 15-minute closing session, during which you can place orders at the day’s closing price.

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Factors to consider when participating in Muhurat Trading

Muhurat trading often creates a favorable market environment, as traders actively buy, boosting market volumes. It’s a great time to adjust your portfolios and make strategic purchases, taking advantage of the optimism and potential price changes during the session. Muhurat trading also allows new investors to enter the market, supported by the symbolic belief in prosperity and good luck. However, there are a few essential things to keep in mind while trading during this special session:

• Plan Ahead: Before trading, make sure you have a clear plan. Decide which stocks to trade and set your buying and selling targets. Research those stocks thoroughly. A solid plan helps you make better trading decisions.
• Stay Informed: Stay up to date with market news and trends. This will help you choose the right stocks. Follow brokerage firms, financial news channels, and social media to stay updated.
• Use Stop-Loss Orders: Protect your investments by setting stop-loss orders. This way, if a stock’s price drops beyond a certain point, it automatically gets sold.
• Diversify Your Investments: Don’t put all your money in one stock. Spread your investments across different sectors to reduce risk, and use the CAGR calculator to understand potential returns. 
• Control Your Emotions: Avoid impulsive trading. Stick to your plan even when the market is volatile. Trading based on emotions often leads to losses.
• Start Small: If you’re new to trading or muhurat trading, begin with a smaller amount. This way, if things don’t go as planned, any losses are manageable.
• Practice Patience in Volatility: During the brief Muhurat Trading session, concentrated buying activity can lead to noticeable price swings, making the market more volatile. The heightened trading volume and optimistic sentiment often drive these rapid price changes. However, this volatility is typically short-term, with prices stabilizing soon after the session concludes. So, don’t rush decisions and stick to your strategy to maximize gains.
• Manage Expectations: Remember, this session is more symbolic than strategic. Keep your expectations about market movements realistic. Focus on long-term goals rather than short-term gains.
• Consider Market Trends: Liquidity and market trends can affect your results. Use this time to review and adjust your portfolio, preparing for the upcoming financial year.
• Stay Optimistic: Embrace the session’s cultural significance. Participate with a positive mindset, aiming for growth while keeping a cautious approach. However, as you prepare for Muhurat Trading, remember  the differences between long-term investment vs. stock trading. 

Bottomline:

Muhurat trading is a meaningful blend of tradition and finance, where every trade is more than just a transaction. It symbolizes hope, prosperity, and a fresh start for the financial year. As you participate, embrace the spirit of Diwali, trading not just for profits but to welcome success and positivity into the year ahead. However, consult shares advisory services or SEBI-registered investment advisory for a better investment choice that fits your financial profile. 

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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