The market will be closed for general trading on the occasion of Diwali, while the special trading window will be open for only one hour in the evening. NSE said that the pre-opening session will be conducted from 5:45 pm to 6:00 pm.
This tradition of conducting business during the auspicious one-hour session is based on planetary positions, as it is considered auspicious to start new business activities amidst the glow of lamps and vibrant colors of rangoli patterns.
Historically, investors have seen positive returns, with the BSE Sensex closing higher in 13 of the last 17 special sessions.
Equity indices have historically performed very well on these special trading sessions, although generally lower trading volumes are seen and fewer stocks move during these shorter periods. The year 2008 was an exception in which the Sensex surprised even the most optimistic bulls by climbing 5.86% in the one-hour session. It settled at 9,008 for the day, but remained range-bound for the rest of the year as the global financial crisis unfolded.
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Since 2012, the Sensex has closed in the green zone 9 out of 12 times, with an increase of 355 points or 0.55% on November 12, 2023. However, the post-Muhurta trading session has not always been so favorable. The index has fallen 7 times in the last 11 years.
Why is Muhurta trading important?
Muhurta trading is important as it marks the beginning of the financial new year for stockbrokers in India. Many investors believe that buying stocks during this session brings prosperity for the coming year. It also gives traders an opportunity to diversify their portfolio and open new settlement accounts. Overall, Muhurta trading represents optimism and growth for the upcoming business season, encouraging confidence in the stock market and reflecting a sense of prosperity for the coming year.
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