It is less than a week to Diwali 2018 and most people are started preparing for this auspicious occasion in different ways. Even the stock brokers and traders are excited about Diwali. However, their excitement is very different from the rest of the people. It is because it is the time of Muhurat trading also called Mahurat trading. Indian stock traders and brokers celebrate Diwali in a very special way – through the Muhurat trading session.
Muhurat trading is the example of an age-old tradition which Indian stock exchanges have retained. According to Hindi lexicon, ‘Muhurat’ means an auspicious time which decided by planetary movements. And as the name suggests, Muhurat trading is that auspicious time or hour where the trading activity during that time considered auspicious.
In our country, Diwali marks the beginning of the New Year. And it is the belief of our countrymen that Muhurat trading on this auspicious day brings fortune, wealth, and prosperity for the year ahead. The two most dominating communities in Indian stock market – Gujarati & Marwari, begin their new financial year on Diwali. Means, only accounts books closed and new ones open on this occasion. It is so important to them that even the family members of stockbrokers join the prayers held in the broker’s office. Besides, Diwali is also the time when we workship Goddess of Wealth.
The Muhurat trading session is not much different except the volatility in stock prices tends to be less on the auspicious occasion. So, if you are a beginner then you can start trading on this day. However, the day would only matter to you if you are religious and superstitious. Nevertheless, you can begin your trade on this day off because the market is usually biased towards buy orders rather than sell orders so market often ended on a positive note on that day.
But, you shouldn’t ignore Muhurat trading if you are holding stocks in your portfolio. It is because the market is closed on Diwali day and stock prices tend to move in the Muhurat session as per the global and domestic sentiment. This is why the foreign investors are also taking interests in the Muhurat trading as well. But, don’t take it granted. Don’t get your hopes too high.
Make sure you do complete analysis while picking a stock not driven by superstitious sentiment alone. Historic data shows that there is no direct correlation between returns on the day of Muhurat trading and following movements in the market.
To mark the auspicious occasion of trading during Diwali, the leading stock exchanges NSE & BSE have declared the trade timings for Muhurat trading for Diwali 2018 will be conducted on 7th Nov. 2018 – in the evening. Diwali Muhurat trading will begin from 5:00 pm and will last till 6:40 pm, which mentioned by NSE & BSE in separate notices.
Stock Markets will remain closed on November 8 on account of ‘Diwali Balipratipada’.
According to NSE & BSE circulars, block deal session will be held from 05:00 pm to 05:15 pm, the pre-open session will be open at 05:15 pm and close at 05:23 pm. It is according to the circulars with respect to Diwali Muhurat trading in equity segment.
For equity derivative segment (F&O) and commodity derivatives, the Muhurat trading will be facilitated for an hour between 5:30 pm and 6:30 pm which will be followed by a set up cut off time for determining position limit value up until 6:45 pm.
In currency derivatives, the trading will start from 5:30 pm only and closing time will be as follows:
6:15 pm – for USDINR, EURINR, GBPINR, JPYINR, T-Bills, and Interest rates futures.
6:30 pm – for cross-currency derivatives such as EURUSD, GBPUSD, and USDJPY.
In MCX Commodity Market Diwali Muhurat Trading timing for 2018 is from 05:30 pm to 06:30 pm. Commodity Market of India will Remain Open for 1 hours of trading.