Active Stocks
Thu Apr 25 2024 09:57:59
  1. Kotak Mahindra Bank share price
  2. 1,659.40 -9.96%
  1. Axis Bank share price
  2. 1,106.65 4.04%
  1. Tata Steel share price
  2. 165.20 -0.18%
  1. Power Grid Corporation Of India share price
  2. 292.15 0.55%
  1. State Bank Of India share price
  2. 780.50 0.94%
Business News/ Markets / Stock Markets/  Diwali 2023: To buy or not to buy - what should be your strategy for Muhurat trading?
BackBack

Diwali 2023: To buy or not to buy - what should be your strategy for Muhurat trading?

Every year, on the auspicious occasion of Diwali, the Indian market opens for a one-hour special trading session in the evening known as 'Muhurat trading'. Should you buy in the one-hour window this year? Find out.

While the market is closed on the day of Diwali, both the BSE and the NSE will conduct the ‘Muhurat trading’ between 6:00 pm and 7:25 pm on Sunday, November 12.Premium
While the market is closed on the day of Diwali, both the BSE and the NSE will conduct the ‘Muhurat trading’ between 6:00 pm and 7:25 pm on Sunday, November 12.

Every year, on the auspicious occasion of Diwali, the Indian market opens for a one-hour special trading session in the evening known as 'Muhurat trading'. The word ‘Muhurat’ means an auspicious time.

While the market is closed on the day of Diwali, both the BSE and the NSE will conduct the ‘Muhurat trading’ between 6:00 pm and 7:25 pm on Sunday, November 12.

The Bombay Stock Exchange (BSE), Asia’s oldest stock exchange, has been conducting the Diwali Muhurat trading sessions since 1957. The NSE started this tradition in 1992. Over the past ten Muhurat trading sessions, the market concluded seven such one-hour windows with positive returns.

According to the Hindu calendar, Diwali marks the start of a new year (Samvat) and this session sets the tone for the upcoming year.

Read here: Diwali Muhurat trading 2023: Date, stock market timings, other details you should know

Should you buy in the one-hour window this year? And if yes, what should be your strategy?

Most analysts believe that investors should buy on the day of Diwali. According to them, since Muhurat trading marks a new beginning, it’s the right time to review your asset allocation and find out if your portfolio is performing as per your financial goals and rebalance. They suggest maintaining a stock-specific approach to buying for the long term and at the same time exercising caution.

Since liquidity is very limited on the Muhurat trading day, it is not advisable to buy or sell a lot. Still, most investors, especially new investors, can get started by making token investments in stocks they are interested in, on this auspicious occasion.

In case you are confused regarding where to invest or what to buy, consult a financial advisor.

Most brokerages have also come out with a number of top stock picks to help investors decide what to buy this Diwali.

Read here: SBI, L&T and more: ICICI Direct lists 7 stocks to buy this Diwali

Ajit Mishra - SVP, Technical Research, Religare Broking Ltd

We have been seeing consolidation in markets amid mixed global cues, however, select stocks from across the sectors are performing well. We thus feel it is prudent to maintain a stock-specific approach and shift the bias more on long trades if Nifty manages to hold the 19,500 mark decisively.

Manoj Dalmia of Proficient Group of Companies

Muhurat trading, a special one-hour session on Diwali, often sees high trading volumes and rising stock prices. While it may seem like an opportunity for quick gains, it's important to exercise caution. It is advisable to maintain a long-term perspective when investing, avoid relying solely on stock tips, and be mindful of the potential for price volatility. If you're new to trading, consider refraining from intraday trading during this brief session. In summary, approach Muhurat trading with a strategic and cautious mindset to make the most of this unique trading opportunity.

Trivesh D, COO, Tradejini

On Muhurat trading day, you don't just throw darts at a board and hope for the best. You look for stocks that are the real deal – strong fundamentals, and a history of solid performance. It's about respecting the day and going for investments that are meant to last, not just the quick wins.

Also Read: Diwali 2023: Market loves to celebrate; Nifty fell in only 3 of last 15 Muhurat trading sessions

Harjeet Singh Arora, Managing Director at Mastertrust

Meticulous planning is imperative, particularly within the short time frame of Muhurat trading. We have to clearly outline our financial goals whether we are looking for short-term gains or long-term investments. Usually, we witness volatile trading sessions hence thorough research is very important before deploying any trade. Look for companies with strong fundamentals, positive earnings reports, and growth potential. Additionally, we can also find stocks based on technical studies for short-term trading opportunities.

Risk management is a highly important part that we can’t afford to ignore. Risk appetite varies from individual to individual, for long-term investment, portfolio risk could be mitigated by proper diversification. Investors are not recommended to concentrate all investments in one stock or sector. However, given the short duration of Muhurat trading, liquidity is also a big factor. Especially for intraday traders - choose stocks with sufficient liquidity to ensure smooth execution of trades.

Kunal Ambasta, Co- Founder and Chief Investment Officer at Liquide

Diwali, the festival of lights, is deeply rooted in sentiments of optimism, hope, and fresh beginnings. Embarking on an investment journey during this auspicious time symbolises the victory of financial enlightenment and wealth creation over the challenges and uncertainties that often overshadow our financial paths.

Regarding trading strategy, the principles during Mahurat trading remain consistent. It is imperative to conduct comprehensive research into a company's financial health, business model, industry trends, and competitive position prior to making stock investments. Muhurat trading is primarily about sentiment rather than technical or fundamental stock selection, given its deviation from standard market dynamics due to its brief duration, the festive ambiance, and reduced participation from foreign investors.

Read here: Equity vs Gold: What should you invest in this Diwali?

For investors with a long-term horizon, purchasing small amounts of blue-chip stocks during Muhurat trading is seen as a propitious move. Another option for investors is to invest in baskets/ ETFs, which offer exposure to a diversified array of assets, requiring a smaller investment outlay.

However, on the contrary, SP Toshniwal, Founder and CEO of ProStocks, has advised investors to avoid trading, especially on Muhurat day. But, if you want to buy for the long term, you can look for stocks with a good track record of execution of order book, he said.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before taking any investment decisions.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 12 Nov 2023, 09:11 AM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started