Samvat 2080 will start on Sunday, November 12, according to the Gregorian calendar. In the stock market, the commencement of any Samvat is marked by Muhurat Trading. This year, the Muhurat Trading session will be held on Sunday, November 12, between 6 pm and 7.15 pm.

Live TV

Loading...

Muhurat Trading, a tradition in Indian financial markets, is an one-hour special session conducted on Diwali, symbolising the auspicious start of the new year. BSE, with a legacy dating back to 1957, and NSE, since 1992, have continued the tradition, offering investors an unique opportunity to engage in trading activities amid the festivities.

Investors believe that engaging in stock trading during this sacred hour can bring good fortune and prosperity throughout the upcoming year. Traders often start new settlement accounts on Diwali, emphasising the ceremonial aspect of the occasion.

The session comprises a 15-minute pre-opening and closing period, with all trades executed on the same day. This condensed timeframe adds an element of excitement and volatility to the market movements during this special session.

What happens during Muhurat Trading?

The session is divided into the following parts:

Block deal session, where two parties agree to buy/sell a security at a fixed price and inform the stock exchange about it

Pre-open session, where the stock exchange determines the equilibrium price (usually around eight minutes)

Normal market session is the one-hour session where most trading takes place

Call auction session, where illiquid securities are traded. Security is termed illiquid if it satisfies the criteria set by the exchange.

Closing session, where traders/investors can place a market order at the closing price

Historical performance

In both 2021 and 2022, Sensex and Nifty recorded gains of 0.49% and 0.88%, respectively during Muhurat Trading sessions. While past performance is not indicative of future results, these positive trends highlight the potential profitability of Muhurat Trading.

What should investors do?

Follow a strategic approach

Harjeet Singh Arora, Managing Director at Mastertrust, emphasises the need for meticulous planning during Muhurat Trading.

"Setting clear financial goals, whether for short-term gains or long-term investments, is paramount. Thorough research, focusing on strong fundamentals, positive earnings reports, and growth potential, is crucial within the short time frame of the session," he said.

Do risk management

Given the inherent volatility of Muhurat Trading, managing risks becomes critical. Diversification, even within this brief window, is key.

Experts caution investors against concentrating all investments in one stock or sector. Additionally, liquidity is emphasised, especially for intraday traders, urging them to choose stocks with sufficient liquidity for smooth trade execution.

Keep close eye on resistance and support levels

Traders must keep a close eye on the resistance and support levels.

"During sessions, it has been observed that the markets can be volatile with no specific direction. Hence, as a day trader, keeping the resistance and support levels at the center of trading decisions will help traders make better decisions," as per Groww.

Stick with fundamentals of the company

Investors must ensure that they stick with the fundamentals of a company before investing in its stock for the long-term.

"The session is usually filled with a lot of excitement and rumors can spread fast. Stick with the basics and invest in sync with investment plan and risk tolerance," Groww noted.

Choose stocks with good trading volumes

Traders should ensure that they choose stocks with good trading volumes since the trading window is only for one hour.

Outlook for Samvat 2080

According to Arora of Mastertrust, the market looks set to continue its positive momentum into Vikram Samvat 2080.

"Big players like global banks and financial institutions are feeling optimistic about India. Adding to the positive vibe, foreign direct investment (FDI) in India hit $83.6 billion in 2021-2022, up from $45.15 billion in 2014-2015. Also, there's a buzz that the US Federal Reserve is done raising interest rates, contributing to the overall positive outlook," he said.

Now, when it comes to one's money, it's all about balance. Arora suggests investors to make a choice between equity and gold, while matching them with goals, time horizon, and risk tolerance.

"Gold is like a financial superhero – a safe-haven asset that fights off inflation. Think of it as a long-term investment buddy rather than a short-term fling. Equity markets might be a bit of a rollercoaster, but historically, they've outshone other investments. So, if investors are in it for the long haul, the equity market could bring some impressive returns. Just remember to spread investments wisely based on risk appetite," he said.

(Edited by : Amrita)