Muhurat Trading: Origins, Significance, and Features

#GS-3 #Economy #Banking #Growth #Current Events #National #Financial Markets #Muhurat Trading #BSE #NSE

Key takeaways

The BSE started formal Muhurat trading in 1957, and the NSE adopted the tradition in 1992.
Over the past 20 years, benchmark indices have closed in the green during 75% to 80% of these festive sessions.
The event features a special one-hour trading window held on Diwali evening to mark the start of the new Vikram Samvat financial year.
Rather than high-volume intraday speculation, the session mostly sees symbolic, long-term buy-and-hold retail investments.

Benchmark indices Nifty 50 and Sensex continued their seven-session gain during the Diwali Muhurat trading session.
This special trading window marked a favorable beginning for the traditional Hindu accounting year, Samvat 2083.

Muhurat trading is a planned, ceremonial one-hour session held by stock exchanges on Diwali evening.
The BSE and NSE hold this session during Lakshmi Puja to celebrate the start of the traditional Hindu financial year, Vikram Samvat.

This tradition originated from the customary merchant ritual called Chopda Pujan.
During this ritual, Gujarati and Marwari merchants closed old account ledgers and worshipped new books before Goddess Lakshmi and Lord Ganesha.
The BSE officially institutionalized this practice into an organized market trading session in 1957.
The NSE embraced this custom in 1992, shifting the event from physical trading rings to modern digital platforms over time.

The session aims to seek divine blessings for prosperity, wealth, and financial stability for the coming financial cycle.
It provides investors and brokerage firms an auspicious start to buy assets and set a positive tone for the year.

Trading occurs outside routine business hours across a pre-opening phase, a continuous one-hour window, and a closing auction.
The market opens orders across various segments such as equities, commodity derivatives, currency derivatives, and equity derivatives.
Market activity mainly features token purchases and long-term retail portfolio additions rather than speculative institutional trading.

The session typically displays an upward trend, with major indices finishing in the green in 75% to 80% of sessions over the last 20 years.
Investors generally follow a buy-and-hold strategy, purchasing blue-chip equities, digital gold, or index ETFs instead of intraday positions.
The short 60-minute window aggregates festive retail buying while protecting participants from broad global market swings.
Modern digital share purchases during this session formally replace the historic custom of opening fresh paper account books.
Stock exchanges coordinate the timing of the session with astrologically auspicious planetary hours on Lakshmi Puja.