Diwali 2023: What is ‘samvat’ and why does it hold significance for stock market investors?

The five-day festival of Diwali kicks off today with Day 1 being Dhanteras, which is considered an auspicious day to buy big-ticket items like gold, car, house, etc. However, while traditional investments continue to hold a lot of significance during Diwali, equity over the years has emerged as one of the preferred investment options. 

To mark the beginning of a new 'samvat' (new year as per the Hindu calendar), every year the market opens for a special one-hour trading session on the day of Diwali, known as 'Muhurat' (auspicious time) trading. It is believed that this session sets the tone for the new 'samvat' or year.

Of the past ten Muhurat trading sessions at the beginning of a new 'samvat', the market concluded seven such one-hour windows with positive returns.

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What is 'Samvat'?

Vikram Samvat is a calendar system followed by Hindus and Sikhs in the Indian subcontinent, with ‘samvat’ meaning year. In fact, it is the official calendar of Nepal. Based on the solar sidereal years and lunar months, in India, this calendar is used as a regional one in many states, mainly in the central, west and north India.

There are 12 months in this year with two fortnights each month having 30 lunar days called ‘tithis’.

The origin of this calendar year dates back to an era called 'Vikrama'. An inscription dating back to the year 971 is associated with King Vikramaditya. As per several historians, King Chandragupta II conferred upon himself the title of Vikramaditya, also changing the name of that era to 'Vikram Samvat'.

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Samvat 2080

This Diwali, Samvat 2079 will conclude and Samvat 2080 will begin, which indicates the beginning of the new year, as per the Hindu calendar. The beginning of Samvat 2080 will be marked on November 12, Sunday. For market investors, the day holds a lot of significance as Muhurat trading will be conducted that day between 6:00 pm and 7:25 pm.

Most investors, especially new investors, can make token investments in stocks they are interested in, on this auspicious occasion. Experts believe Samvat 2080 will see the bull run continuing albeit high volatility in the near term.

"We embark on this new Samvat with a narrative marked by ‘Higher for Longer’ interest rates, volatile bond yields, geopolitical conflicts in the Middle East, and fluctuating oil prices. However, on the domestic front, the prospects for the Indian economy appear notably brighter and more promising. Amid a volatile global landscape, India remains in a favourable position for growth, which will be a significant driving force behind Indian equities in the foreseeable future," says Pranav Haridasan, MD & CEO, Axis Securities.

"The overall outlook for the Indian equity market appears exceptionally bullish, underpinned by robust fundamentals and domestic liquidity," Sunil Nyati, Managing Director of Swastika Investmart.