Muhurat Trading 2024: Date, Time And Past Performance Of Sensex On Diwali

Preparations for the festive season are over and India is gearing up to celebrate Diwali on Nov. 1. The festival of lights is a celebration of wealth, prosperity and growth in life. The auspicious occasion marks the triumph of light over darkness. For stock markets, the day has special significance.

Investors, as well as all business owners, look forward to the Muhurat Trading session that is held on Diwali every year.

While the stock exchanges remain closed, a special one-hour trading session is held in the evening on Diwali to mark the beginning of the new Samvat. This year it will be the beginning of Samvat 2081.

Muhurat Trading is a special one-hour session held on the occasion of Diwali. This special trading session is divided into multiple slots dedicated to specific market segments, such as stocks, derivatives and commodities.

The timing of the session changes each year based on the Panchang and Hindu calendar. Typically, the session is held during the evening, marking the beginning of New Year or Samvat.

In 2024, the Muhurat Trading session will be held in the evening of Nov. 1. The pre-opening session is scheduled to commence at 5:45 PM. and will last for 15 minutes. After the pre-opening session, the stock exchanges, NSE and BSE, will hold their annual Diwali Muhurat trading session on Friday, November 1, 2024, from 6:00 PM to 7:00 PM, as per the NSE notification.

Here's a look at the different parts of the Muhurat Trading session:  

The block deal session is the initial phase of Muhurat Trading. In this session, traders commit to the sale or purchase of a security at a predetermined price. The buying or selling is reported to the stock exchange.

The pre-open session is also called the 'Call Auction' session. In this part of Muhurat Trading, the exchanges calculate the opening price based on supply and demand. Typically, this process takes nearly eight minutes.

This refers to the near-one-hour trading session, where the bulk of transactions are executed as investors make token trades.

During this part of the special session, securities that are not frequently traded, also known as 'illiquid' securities are traded based on the specific criteria outlined by the exchange.

This is the final part of the special trading session, in which, traders and investors are allowed to place orders at the market's closing price.

Traders and investors conduct symbolic trades during Muhurat Trading. It is believed that trading on this occasion is supposed to bring good luck and prosperity. While the tradition has been practised unofficially for ages, the BSE adopted the tradition in 1957. The tradition was later adopted by the National Stock Exchange as well.

Traders gathered at the exchanges to conduct trade during the special session, prior to the introduction of electronic trade through Demat accounts. Nowadays, traders make ‘token’ trades to attract good luck and prosperity for the upcoming months of the year.

Muhurat Trading not only has immense significance for traders but also has a significant impact on the market. Investors closely track the performance of the 30-share benchmark index, the Sensex, during Muhurat Trading. The positive performance of the benchmark index is interpreted as a good sign for the year ahead.

In the last decade, the benchmark index, during the Muhurat Trading, has shown a mixed trend. While the Sensex posted a consecutive decline in 2016 and 2017, the index has managed to close in the green for the past six years in the special trading session. In 2023, it posted a gain of 355 points.