Diwali 2022: Here’s why markets open for an hour of Muhurat trading on the holiday

The tradition has cultural and symbolic significance in India, but can also be an opportunity for lucrative stock trading.

FPJ Web DeskUpdated: Saturday, October 22, 2022, 03:11 PM IST
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Muhurat trading at Indian stock exchanges has been going on since 1957. | PTI

Apart from the victory of good over evil and the skies lit up in celebration with diyas lined up outside households, Diwali also symbolises an auspicious time of the year. It is considered to be one of those occasions when the stars align to make sure that every decision made than will yield positive results. People invest in gold on Dhanteras, and buy vehicles, electronics or phones on Diwali with a hope for benefits from each purchase. Hence the stock markets that remain closed on most festivals, open only for one hour on Diwali, for a muhurat that’s a time period seen as the most auspicious.

An age old traditions

The Muhurat trading tradition started in 1957, and the short window for buying and selling stocks opens during the evening around 6:00 PM, as opposed to normal trading days when markets close at 3:30 PM. Trading during muhurat is driven by the belief that investors who conduct transactions during the period will earn good returns throughout the year that follows. It’s also in line with the age old tradition of worshipping account books along with Goddess Laxmi and Goddess Saraswati as well as Lord Ganesha.

More than just a symbolic gesture

Although the cultural practice of Muhurat trading has now turned into a symbolic gesture of placing trust and wishing the best for companies by investing funds in their stocks, there are more benefits in store. Actively trading during this one hour window can be lucrative for investors, since the markets are volatile, and can deliver higher profits in the longer run. Since it symbolyses goodwill and the festive spirit, Muhurat trading is also a good chance for new traders to try out smaller stocks.

Markets and festive rallies

The Muhurat trading practice is unique to India, just like the Halwa ceremony which marks the beginning of the process to print budget related documents in the country. Beyond India, the Santa Claus rally refers to a week of positive performance for stock markets starting from Christmas and stretching into the new year.

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