During Diwali Muhurat Trading session, investors make symbolic investments to mark the new year in the Hindu calendar also known as Samvat
Diwali Muhurat Trading is a symbolic and culturally significant event in the Indian equities market, held annually during Diwali. With Diwali just around the corner, the National Stock Exchange (NSE), BSE and the Multi Commodity Exchange of India (MCX) have announced the date for conducting their muhurat trading session.
The one-hour trading session will be observed on Friday, November 1, 2024.
"A special live trading session shall be held on Friday, November 1, 2024, on account of muhurat trading on Diwali," the NSE notification read.
MCX will also conduct its special trading session on November 1. "On the occasion of Diwali (Laxmi Pujan Day), contracts of all commodities and indices will be available for muhurat trading on Friday, November 1, 2024," it said in a statement.
The tradition of Muhurat trading dates back several decades, with BSE being one of the first to formalise it. It typically takes place on the evening of Diwali or the day of Laxmi Pujan. During this session, investors make symbolic investments to mark the new year in the Hindu calendar also known as Samvat. It is believed that investments made during this time will bring good luck, prosperity and positive returns throughout the year. Diwali 2024 marks the beginning of Samvat 2081.
“Samvat 2081 marks a significant year for the global economy, starting amidst a global rate-cutting cycle. The US FED cut rates last month by 50 bps to 5% - the first such move since the pandemic lows - with expectations for two more cuts before year-end. Back home, the RBI kept policy rates unchanged in its most recent MPC meeting while shifting its stance from 'withdrawal of accommodation' to 'neutral', but reiterated that it would not be appropriate to talk about the timing of rate cuts in a scenario where inflation risks remain,” said Pranav Haridasan, MD and CEO at Axis Securities.
“That said, we subscribe to the view that a rate cut or two could materialize in Samvat 2081, depending on the trajectory of growth and inflation. While the long-term growth story for Indian equities remains stronger than ever, current valuations leave limited room for expansion. This means that growth in corporate earnings will be a pivotal driver of market returns. Stock picking with a balance of growth - at a reasonable price - and quality will be critical to achieving good returns over the coming year,” he added.
Muhurat trading will start at 6 PM and will conclude at 7 PM on Friday, according to notification by NSE.
The set up cut-off time for position limit/collateral value and trade modification closing time is 7:10 PM.
After the cut-off time, no new positions can be initiated and no changes can be made to open trades including modifications, cancellations or adjustments.
In addition, on account of trading on November 1, 2024, the pay in/pay out transactions for the trade dates October 31, 2024 and November 1, 2024, shall be settled on November 4, 2024 at 8:30 AM.
MCX will also observe its special muhurat session from 6 PM to 7 PM on Friday. It will also have a pre-session (special session) from 5:45 PM to 5:59 PM on the same day. There will also be a client code modification session from 6:00 PM to 7:15 PM.
Investors often track returns from one Diwali muhurat session to the next. From 2014 to 2023, eight out of ten Muhurat sessions saw positive returns, reflecting the optimistic sentiment typically surrounding this period. During the last decade, benchmark indices Sensex and Nifty 50 have witnessed an average Muhurat-to-Muhurat return of 11-13 per cent. On the Muhurat day itself, the benchmark indices are likely to record moderate gains of 0.5-1 per cent.