Every year, on the auspicious occasion of Diwali, the Indian stock exchanges open just for a one-hour special trading session in the evening known as 'muhurat trading'.
While markets are closed on Diwali, both BSE and NSE will conduct the Muhurat trading between 6:15 pm and 7:25 pm on Monday, October 24.
The indices have generally performed decently on this occasion even though the trading volumes are pretty low. In the last 15 years, since 2008, 12 out of the 15 muhurat trading sessions have ended in the green.
Last year, Diwali was observed on November 4 and the indices rose around half a percent higher. Previous year on Muhurat trading, the Sensex ended 295.70 points or 0.49 percent higher at 60,067.62 while the Nifty added 91.80 points or 0.51 percent to settle at 17,921. The broader markets were also in-line with benchmark indices with midcap and smallcap indices ending 0.5-1 percent higher.
Among sectors, auto and PSU Bank indices rose over a percent each.
The Indian markets have followed a similar trend in the past. In 2020, the indices rose between 0.5 percent in Muhurat trading followed by a 0.37 percent rise in 2019 in Muhurat trading and a 0.7 percent rise in 2018. However, they saw minor losses in muhurat trading in 2017, 2016, and 2012.
The best Muhurat trading performance till date was witnessed in 2008 during the peak of the global financial crisis in 2008. In that Muhurat Trading session on October 28, 2008, the indices jumped nearly 6 percent, the highest ever in a Muhurat session.
It's important to note that since liquidity is very limited on the Muhurat trading day, it is not advisable to buy or sell a lot, but most investors especially new investors can get started by making token investments in stocks you are interested in, on this auspicious occasion. One must not get influenced by the festival sentiments and invest only a small amount. In case you are confused regarding where to invest or what to buy, do consult your financial advisor.
Let's take a look at how the indices performed each year since 2008 on Diwali day:
|Year||% Rise/fall on Muhurat trading|