Samvat 2081: All you need to know about Diwali Muhurat trading

With the arrival of Diwali, known for bringing prosperity and happiness, investors across India are gearing up for a new financial beginning through the eagerly awaited Diwali Muhurat trading session. This symbolic trading period, marking the start of Samvat 2081, provides an auspicious moment for market participants to establish a prosperous investment year.

Muhurat trading is a special, live trading session hosted by Indian stock exchanges on Diwali, typically lasting about an hour. Considered a propitious time, it encourages investors and traders to make stock and commodity purchases, symbolising the start of a new financial year. This year's session is scheduled for Friday, November 1, 2024, according to a notification from the NSE.

“A special live trading session shall be held on Friday, November 1, 2024, on account of muhurat trading on Diwali,” the notice stated. On the same day, MCX will also hold a dedicated trading session, allowing trades across all commodity contracts and indices.

The NSE notification specifies that Muhurat trading will commence at 6 PM and end at 7 PM on Friday, with a cut-off time of 7:10 PM for position limits, collateral values, and trade modifications.

No new positions or modifications to open trades will be permitted after this cut-off, including cancellations or adjustments.

Additionally, due to trading on November 1, settlements for transactions on October 31 and November 1 will occur on November 4 at 8:30 AM.

MCX will also conduct its Muhurat session from 6 PM to 7 PM, with a pre-session starting at 5:45 PM and concluding at 5:59 PM. A client code modification session will take place from 6:00 PM to 7:15 PM, allowing adjustments to trading platforms or algorithms to better serve clients.

Muhurat trading, a tradition dating back decades with the BSE being one of the first to institutionalise it, reflects the belief that investments made during this time invite prosperity for the upcoming year. The NSE later adopted this practice, recognising it as a special session.

Diwali, as per the Hindu calendar, is observed on the Amavasya Tithi of Krishna Paksha in the Kartik month, with this year’s Amavasya expected to occur on October 31, 2024.

Despite recent corrections following a peak in the Nifty index at 26,277, optimism surrounds the Muhurat session on November 1, seen as a strategic opportunity amid substantial FII outflows in October.

During this session, conducted in the evening of Lakshmi Puja, small yet symbolic trades by retail investors and institutions signify positive intentions rather than high volumes. Many, even non-regular traders, participate with token investments, viewing them as harbingers of good fortune for the year ahead.

Characterised by modest volumes and strong optimism, Muhurat trading has become an integral part of India's financial tradition.