Muhurat trading is a special, time-window stock market session conducted by Indian exchanges on Diwali, observed as an auspicious start to the Hindu New Year and believed to bring prosperity for the investment year ahead. It’s a symbolic tradition where many investors and brokers place token buy orders, perform “Lakshmi Pujan,” and open new trading books to mark good fortune and fresh beginnings.
What it involves
- Short session on Diwali: Exchanges announce a limited-duration evening session, typically including pre-open, continuous trading, and closing, separate from regular hours.
- Rituals and symbolism: Participants often perform puja at offices or terminals, and place inaugural trades as a sign of auspicious intent for the financial year.
Why it’s special
- Cultural significance: It aligns markets with the Diwali ethos of prosperity, making it a unique blend of finance and tradition in India’s market calendar.
- Community participation: Higher retail and broker engagement in a celebratory setting fosters continuity, goodwill, and long-term investing sentiment.
Practical tips for investors
- Treat it as symbolic: Consider small, quality purchases rather than speculative bets; focus on long-term holdings and asset allocation discipline.
- Check timings and settlement: Verify exchange-circular timings, segment eligibility (equities, F&O), and settlement rules which may vary from normal trading days.
- Risk basics still apply: Even in a festive session, diversify, avoid leverage-led impulses, and use limit orders for better execution control.
FAQs
- Is participation mandatory?
No; it’s optional and largely ceremonial, though many investors choose to participate for tradition and sentiment. - Do stocks always rise during muhurat?
Not necessarily; price action is driven by orders placed during the window—use prudent orders and long-term perspective. - Are all segments open?
Exchanges specify which segments are available (equity cash, derivatives, commodities) and the exact sub-session timings in advance. - Does it affect taxes or accounting?
No special tax rules, but many brokers mark it as the start of a new trading ledger year symbolically tied to Diwali.
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