Diwali 'Muhurat Trading' 2023: Date, Timings, Significance And All You Need To Know

Leading stock exchanges BSE and NSE will conduct a one-hour special 'Muhurat Trading' session on the occasion of Diwali.

The special muhurat trading session will mark the beginning of a new Samvat 2080-- the Hindu calendar year that starts on Diwali. The term 'Muhurat' refers to an auspicious time in the Hindu calendar.

This year, the special Muhurat trading session will be conducted on Sunday, November 12. It will be held between 6 pm and 7.15 pm. This includes a 15-minute pre-market session.

Trading would take place across various segments like equity, commodity derivatives, currency derivatives, equity futures & options, and securities lending & borrowing (SLB) in the same time slot.

The exchanges will remain closed on November 14 on the occasion of Diwali Balipratipada.

During Diwali, the NSE and BSE conduct the Muhurat trading session. The session comprises of:

Block Deal Session: In this initial phase, traders commit to buying or selling a security at a predetermined price, which must be reported to the stock exchange.

Pre-Open Session: Also known as the 'Call Auction,' this is when the stock exchange calculates the opening price based on supply and demand, a process that usually takes around eight minutes.

Main Trading Window: This is the core of the Muhurat trading, lasting for approximately one hour, where the bulk of transactions are executed.

Call Auction Session: During this part of the session, trades involving securities that are not frequently traded, known as the 'illiquid', based on the specific criteria outlined by the exchange.

Closing Session: In this stage, traders and investors are allowed to place orders at the market's closing price.

It is believed that trading during the 'muhurat' or auspicious hour brings prosperity and financial growth for the stakeholders.

Market analysts said that Diwali is considered to be the ideal time to start anything new. Investors are said to benefit from trading during this session all through the year.

Since the trading window is only open for an hour, markets are known to be volatile. The focus might not be on profitability as much as it might be on the gesture, they added.

The history of Muhurat trading in India dates back several decades. The BSE officially organised the first Muhurat trading session in 1957. Investors, particularly the traditional business communities, participate in this trading session to seek the blessings of Godess Lakshmi.

Muhurat trading has become a festive occasion with ceremonial trading taking place amidst the ringing of bells and the lighting of lamps.

The trading done during Muhurat is often symbolic, with many retail investors making token purchases to mark the tradition. However, market performance during Muhurat trading is closely watched by participants, as it is considered indicative of market sentiment for the coming year.

(With PTI inputs)