Generally, markets don't see much trade or activity during this one-hour session, given that muhurat trading is largely symbolic. It stems from the Indian tradition of closing our annual financial accounts on the day of Diwali and then starting afresh with the upcoming new year.
Investors look to make their first profitable transaction of the new year and believe that any new investments during this one-hour window will bring them long-term prosperity. Like with usual trades, settlement happens on a T+1 basis.
Gaurav Garg, who heads the markets desk at Lemonn, a new-age
"Here, it is less about immediate profits and more about its cultural and traditional aspects. The number of trades in this session also tends to be 20–30% lower, compared to a typical trading day, since institutional investors and high-frequency traders stay away from muhurat trading," he adds.
How has the market performed during muhurat trading in the past?
Much like us, the markets also put on a positive, festive outlook during this time. Data suggests that over 10 years, muhurat to muhurat returns, i.e., the performance ofIn fact, in the past decade, the average gain during muhurat trading has been approximately 0.5% to 1% on major indices.
Over the last 10 years, 8 out of 10 muhurat sessions have yielded positive returns for investors. In fact, four of these 8 sessions have delivered double-digit returns. Some of these outliers include 2021, i.e., at the peak of the COVID-19 pandemic, where Nifty’s muhurat-to-muhurat returns were a staggering 40.19%. Sensex closely followed suit with 37.65%.
2022 saw the returns from these indices slip into the reds, despite a positive muhurat day performance. While returns on Nifty slipped 1.04% in negative, Sensex was also down by 0.39%.
Sectorally, consumer goods, automobiles, and
What can we expect this year?
So far, this hasn't been a great season.But, for those looking to get in the market in the long haul, experts note that this is a good opportunity to accumulate good-quality stocks. So, happy Diwali, and happy investing this festive season.