Muhurat trading is held every year for an hour on Diwali
Diwali Muhurat trading 2021: Leading stock exchanges Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) conducted a one-hour special muhurat trading session on the occasion of Diwali today (November 4). Though stock markets remain closed on Diwali, trading sessions are held for nearly an hour.
Domestic equity benchmarks mustered smart gains on Thursday as investors built up fresh positions in the special Muhurat trading session to mark the beginning of Hindu Samvat year 2078.
Reversing its two-session sliding streak, the 30-share BSE Sensex climbed 295.70 points or 0.49 per cent to close at 60,067.62. On similar lines, the broader NSE Nifty advanced 87.60 points, or 0.49 per cent, to finish at 17,916.80.
In the Sensex kitty, prominent gainers were M&M, ITC, Bajaj Auto, L&T, Kotak Bank, Sun Pharma and Nestle India, spurting as much as 2.87 per cent. In contrast, ICICI Bank, UltraTech Cement, Asian Paints, and Dr Reddy's closed in the red, shedding up to 0.43 per cent.
Brokers said buying activity gathered pace as investors opened their new books on the first session of Samvat 2078. The excise duty cut on petrol and diesel added to the festive cheer, they said.
Global equities hovered near record peaks even after the Federal Reserve announced that it would trim its asset purchases by USD 15 billion a month from November, with investors taking heart from the US central bank's assurance that it was in no rush to raise rates.
Barring metal, all BSE sectoral indices finished in the green, led by auto, consumer discretionary goods, capital goods, industrials and FMCG.
A similar trend was seen in the broader markets, with the BSE small-cap index jumping 1.36 per cent and the mid-cap gauge gaining 0.73 per cent.
Domestic markets conduct a special one-hour Muhurat trading session on Diwali every year to mark the beginning of the traditional Hindu calendar year, called 'Vikram Samvat'.
In the previous Samvat 2077, the BSE Sensex rallied 16,133.94 points or 36.97 per cent, while the Nifty soared 5,048.95 points or 39.50 per cent.
The BSE and NSE will remain closed on Friday (November 5) on the occasion of 'Diwali Balipratipada'.
Meanwhile, foreign institutional investors (FIIs) net sold shares worth Rs 401.48 crore on Wednesday, while domestic institutional investors bought to the tune of Rs 195.55 crore, as per exchange data.
What is Muhurat trading?
Muhurat trading is a special symbolic trading session, which stock exchanges hold during Diwali. Trading during this session is believed to bring prosperity and abundance to investors throughout the year. This trading session is generally held as per the auspicious timing, commonly referred to as 'Shubh Muhurat', and so is conducted at a different time every year. However, this is not the only reason why trading sessions are held. Markets can actually close on a positive note as Muhurat trading adds to the market thrust.
Significance of Muhurat trading
During the Muhurat trading session, investors and brokers buy value-based stocks, which are good for the long term. It is believed that during the particular Muhurat, planets are aligned in such a way that brings good fortune to investors throughout the Samvat. Stocks bought on this occasion are also kept as lucky charms by many investors.
Since Diwali is considered an auspicious day to begin anything new, investors also believe buying and passing shares to the next generation is auspicious.
Because of these developments, it is observed that markets typically move upwards during the Muhurat trading session. The investor sentiment is positive with a majority of buying orders across segments.
Stock prices remain stable on this day as most investors prefer buying rather than selling. Investors typically engage themselves in value investing during Muhurat trading.
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