*This is a sponsored article in collaboration with ICICI Direct.
In Indian stock markets, Muhurat Trading holds a special place. It is a traditional practice followed by the financial markets where trading is conducted on the auspicious occasion of Diwali. This tradition is rooted in Hindu mythology, where it is believed that Goddess Lakshmi—the deity of wealth—blesses businesses and investments made at the beginning of the Hindu New Year.
In 2024, the special one-hour Muhurat Trading session is scheduled for Friday, Nov. 1, between 6 pm to 7 pm, and the pre-market opens from 5.45 pm to 6 pm. All trading, including in equity, derivatives, equity futures and options, securities lending and borrowing, and more, is included in the session. Typically, the session comprises a Block Deal Session, Pre-Open Session, Normal Market Session (one-hour session during when most trading happens), Call Auction Session and Closing Session.
As the “Shubh Din” draws closer, it is important to understand its significance and what “Shubh Nivesh” investors can make during this auspicious time.
Why Muhurat Trading Is Considered ‘Shubh’ For Investors
Pankaj Pandey, Head of Research, ICICI Direct, says, “Muhurat trading is a symbolic event on the day of Diwali. As per tradition, this is a good day to start your investing journey. If you want to start an SIP or if someone is looking to reshuffle their portfolios, it’s considered an auspicious day to do that.”
Investors look forward to the day for a variety of reasons:
Auspicious Beginnings: Investing during Muhurat trading is considered to bring positive outcomes, as it is believed to set the tone for the entire year ahead.
Symbolic Gesture: By engaging in trading on this auspicious day, investors express their faith in good luck that goes hand-in-hand with divine blessings.
Traditional Values: The day also reflects the cultural and religious values of investors, creating a sense of unity and camaraderie within the market.
Positive Market Sentiment: The collective optimism and positivity surrounding Muhurat trading often results in upbeat market sentiment.
Muhurat Or Otherwise: Focus On Fundamentals
For many years, investors have typically seen positive returns during the Muhurat Trading session. (Data Source: BSE)
(Image Credit: ICICI Direct)
For many years, investors have typically seen positive returns during the Muhurat Trading session. (Data Source: BSE)
(Image Credit: ICICI Direct)
For many years, investors have typically seen positive returns during the Muhurat Trading session. The BSE Sensex has reportedly closed higher in 13 of the previous 17 Muhurat sessions, recording a 355-point increase in 2023. However, given that Muhurat Trading occurs for a limited time, investors should adapt their strategies to account for this small window.
“Because volumes are also low, and the overall depth in the market is not there compared to normal days, intraday is completely ruled out, ” says Pandey. However, he explains that Investors can look at token buying of stocks or mutual funds.
Investors must evaluate stocks and sectors for trading on Muhurat with the same lens they do on normal days, and conduct thorough research on market trends, stock performance and potential investment opportunities before participating.
“Utilise equities as a key asset class for long-term wealth generation, and this can happen by investing in quality companies which have got a strong earnings visibility, a stable cash flow and good growth visibility, return on equity (ROE) and return on capital (ROC),” Pandey explained.
Capital Goods, Infrastructure Among Sectors With Potential; Silver To Sparkle
Capital goods, infrastructure, banks, IT and pharmaceutical stocks show upside potential.
(Image Credit: ICICI Direct)
Capital goods, infrastructure, banks, IT and pharmaceutical stocks show upside potential.
(Image Credit: ICICI Direct)
For investors who are new to investing or unsure about their strategy for Muhurat Trading, it is always a good idea to consult with financial experts or reputed brokers. They can provide guidance on how to invest during Muhurat Trading and deliver valuable insights into stocks and sectors which have a positive future outlook.
With regard to sectors with upside potential, Pandey suggests capital goods, infrastructure, banks, IT and pharmaceutical stocks. “One way to play the markets is asset management companies,” says Pandey, of the companies which invest pooled funds of investors into various assets and securities.
When it comes to commodities, Pandey again has some insightful views. While gold is a good hedge against inflationary pressures and has a positive outlook as bigger economies are going to expand their fiscal deficit, “silver looks better than gold at this point in time,” says Pandey. Even as physical gold remains in demand during the festive season, gold exchange traded funds are also a good option for investors, considering the ease of investing in them, lower costs and tax efficiency.
Summary
As the auspicious hour of Muhurat Trading approaches on Nov. 1, it’s time to let the blessings of divine at Diwali mark the beginning of a new investment season. However, festive fervour shouldn’t overshadow the importance of thorough research and focus on fundamentals. By letting a reputed stock expert guide critical financial decisions, diversifying “Shubh Nivesh” across sectors with potential—such as capital goods, infrastructure, banks, IT and pharma—combined with commodities like gold and silver and gold ETFs, investors can let the “Shubh Din” set the tone for a prosperous year ahead.
RECOMMENDED FOR YOU
Muhurat Trading 2024: Date, Time And Past Performance Of Sensex On Diwali
Oct 30, 2024
Diwali Picks 2024: Tata Power To Tech Mahindra - Here Are The Top Mahurat Stock Picks By ICICI Direct
Oct 28, 2024
Diwali Muhurat Trading: BSE, NSE Announce Timing Of One-Hour Session On Nov. 1
Oct 20, 2024
ICICI Direct App, Web Users Face Glitch, Raise Complaint On Social Media
Sep 27, 2024
POPULAR