Muhurat Trading Time 2023: Know About Diwali Muhurat Trading

Diwali's Muhurat Trading is an auspicious session on the Indian stock market. This year, Muhurat Trading is on November 12th. Both BSE and NSE have announced that the trading session will take place tonight from 6:00 p.m. to 7:15 p.m. Trading during the Diwali Muhurat session is considered a good omen since it occurs during a holy season in the Hindu calendar. Traders and investors seek good fortune for the new year by engaging in token transactions during this small but crucial opportunity. Market participants indulge in the age-old rite in the hopes that it will bring them success and money in the next year, marking the beginning of the stockbroker’s new year. This exceptional trading session generates a feeling of confidence and an auspicious start for market operations.

5 Stocks for Muhurat Trading 2023

This article will discuss everything you need to know about Muhurat Trading.

What is Muhurat Trading?

Muhurat Trading is a customary ritual followed by Indian traders. 'Muhurat' means an auspicious time, and in Hindu traditions, it represents a moment when planetary alignments are believed to be favorable for achieving positive results.

Muhurat Trading is a special one hour trading session on Diwali day, considered auspicious for investing in shares. Each year, the stock exchange specifies the timing for Muhurat Trading. People who engage in trading during this one hour believe that it brings them blessings from Goddess Lakshmi, the deity of wealth. There's a strong belief that investing during this time can lead to increased prosperity throughout the year, this tradition is unique to Indian stock markets.

Many individuals choose to buy stocks on Diwali and, hold them for the long term, even passing them down through generations.

Muhurat Trading Time on Diwali 2023

Muhurat Trading Session 2023

History of Muhurat Trading

Muhurat Trading has been a tradition on Indian stock exchanges for more than 50 years. It was initially introduced by the Bombay Stock Exchange (BSE) back in 1957. National Stock Exchange (NSE) later followed this tradition, starting its own Muhurat Trading session in 1992, this special trading session has since become an integral part of the Diwali celebrations.

Traditionally, Diwali marked the fiscal year’s commencement for stockbrokers, thus initiating new settlement accounts during the auspicious Muhurat. The broking community engaged in the ritualistic Chopda Pujan, worshipping their account books during Diwali.

Historical observations noted contrasting behaviors during Muhurat trading: Marwari merchants tended to sell stocks, believing Diwali shouldn't invite money into their households, while Gujarati traders were active buyers. However, this belief's relevance in present times lacks empirical evidence.

Today, Muhurat Trading is predominantly symbolic and culturally significant for its auspicious nature. Hindu investors often perform Lakshmi Pujan, a prayer to the Goddess Lakshmi, followed by strategic investments in robust firms expected to yield favorable long-term returns.

What happens in Muhurat Trading?

Muhurat Trading takes place on Diwali, and it's allowed by both the NSE (National Stock Exchange) and BSE (Bombay Stock Exchange). This session is divided into 5 segments:

1. Block Deal Session: During this, two parties agree to buy or sell a security at a fixed price and inform the stock exchange.
2. Pre-Open Session: The exchange determines the equilibrium price within approximately eight minutes.
3. Normal Market Session: This is the one hour trading period.
4. Call Auction Session: It's for trading illiquid securities based on exchange criteria.
5. Closing Session: Traders and investors can place market orders at the closing price.

Importance of Muhurat Trading Hour

The following are the importance of Muhurat Trading for all investors:

1. Symbolic Commencement: In the Indian market, Muhurat Trading, which occurs at the beginning of the fiscal year, is symbolic of good fortune, riches, and success.
2. Cultural Relevance: It integrates spirituality with financial activity and has great historical and cultural relevance inside Indian financial markets.
3. Ritualistic Practice: Rather than seeking substantial market influence, traders often engage in what is seen as a usual ritual in order to get blessings for the next year.
4. Psychological Impact: The upbeat atmosphere that permeates Muhurat Trading fosters a feeling of optimism and camaraderie among market participants, which may have an impact on traders' immediate investing choices.
5. Short Opportune Window: Although the session is brief, it gives traders an opportunity to make token deals, recognizing the importance of this auspicious time in the Hindu calendar.

Who Can Benefit from Muhurat Trading?

Muhurat trading offers a distinctive opportunity for investors to engage in equity trading due to increased trading volumes during this auspicious session. Festive periods like Diwali often evoke a positive market trend as sentiments of prosperity and abundance prevail, fostering optimism about the economy. Both seasoned and novice investors find the Muhurat Trading session advantageous for making investments, capitalizing on this upbeat sentiment.

For those new to investments, Diwali represents an opportune time to commence their journey in the market. Choosing high-quality companies aligned with a long-term investment strategy is essential. Individuals considering stock trading should carefully observe the markets during Muhurat Trading. They should possibly engage in simulated trading to familiarize themselves with the market's nuances due to the heightened market volatility in this one-hour window.

Things to keep in Mind for Diwali Muhurat Trading

Before you begin buying or selling stocks, bear the following points in mind:

1. Settlement liabilities will arise for all open positions at the conclusion of the trading session.
2. Traders should always keep a close watch on these resistance and support levels, since the trading traffic might be higher than usual.
3. Investors should avoid emotional investing at all costs, even during Muhurat Trading. The Muhurat trading period is usually characterized by large crowds of traders who are full of enthusiasm.
4. Since the trading window is only open for one hour, make sure the stocks you pick have strong trading volumes if you want to benefit from the volatility.
5. Returns on investments made during this time are not guaranteed. The stock's future success is contingent upon its fundamentals and macroeconomic conditions, even in the event of a strong Diwali performance.

How Muhurat Trading Influences Stocks?

Muhurat Trading’s influence is derived less from significant market shifts and more from sentiments and tradition. Because of the character of the session, market mood and psychology may be temporarily influenced, probably resulting in a momentary increase in trading volume and slight movements in certain stocks. Any impacts, although usually fleeting, are mostly determined by basic economic, financial, and corporate reasons and not by the symbolic and ceremonial elements.

Terminology Used in Muhurat Trading

The following are some of the terminologies used during the Muhurat Trading session:

1. Block Deal Sessions: These occur when two parties decide to purchase or sell a share at a set price and notify the stock exchange of their agreement.
2. Pre-open Session: The stock exchange establishes the equilibrium price during the pre-open session, which lasts for around eight minutes.
3. Normal Market Session: The hour-long regular market session is when the majority of trading occurs.
4. Call Auction Session: The trading session for illiquid securities is called a call auction. If a security meets the requirements established by the exchange, it is said to be illiquid.
5. Closing Session: Traders and investors may place a market order at the closing price during the closing session.
6. Chopda Pujan: This is a ritual followed by the broking community, where they worship their account books on Diwali.

Muhurat trading has both cultural and symbolic connotations for India’s finance sector. The symbolic beginning of a new financial year is accompanied with positive energy, traditions, and beliefs among investors. The article delineated everything about Muhurat Trading, right from the Muhurat Trading date for 2023 to the various unique terminologies used during this one-hour trading session.

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Frequently Asked Questions:

1. Who started Muhurat Trading? 
The tradition of Muhurat Trading dates back to ancient times in India, influenced by cultural and astrological beliefs. It is believed that King Vikramaditya started Muhurat trading. The Bombay Stock Exchange (BSE) established it in 1957, and the National Stock Exchange (NSE) followed it in 1992.

2. Does the market rise in Muhurat Trading?
There's no guaranteed market rise during Muhurat Trading; it's more of a symbolic and culturally significant session.

3. Can anyone participate in Muhurat Trading 2023? 
Yes, anyone with a trading account can participate in Muhurat Trading on the specified date and time.

4. Are the trading rules and regulations different for Muhurat Trading? 
Generally, the trading rules remain the same for Muhurat Trading, adhering to standard market regulations.

5. Is it necessary to participate in Muhurat Trading?
Participation is not obligatory; it's a cultural and traditional practice, and the market does not require mandatory involvement.

6. Is intraday trading allowed in Muhurat Trading? 
Yes, intraday trading is permitted during Muhurat Trading, similar to regular trading sessions.

7. Can we trade in F&O during Muhurat trading?
Yes, trading in Futures and Options (F&O) is allowed during the Muhurat Trading session.