Diwali, a time of new beginnings and prosperity, is celebrated in the Indian stock markets through the auspicious Muhurat Trading. On November 12, 2023, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) will host this special trading session, offering investors a unique opportunity to partake in an hour of symbolic trading. This event, steeped in tradition and optimism, is not just a cultural hallmark but also a potential financial boon for savvy investors.
Understanding Muhurat Trading: An Auspicious Start for Samvat 2080
Muhurat Trading, a deep-rooted practice in the Indian financial market, signifies the onset of Samvat 2080 - the Hindu New Year. Historically conducted on Diwali, this session is regarded as an auspicious time for investments, aligning with the cultural belief that activities commenced during this period lead to prosperity and success. This one-hour window, a blend of tradition and finance, has been a consistent feature in Indian exchanges, reflecting the market's respect for cultural values.
Muhurat Trading 2023 – Timing & Schedule
The BSE and NSE will host the Muhurat trading today November 12 between 6-7.15 pm. Typically, the session is divided into five parts:
Investment Opportunities: Diversifying Your Portfolio During Muhurat Trading
The Muhurat Trading session opens trading windows across market segments. Thus, you can invest in equity, commodity derivatives, currency derivatives, as well as equity futures & options. Additionally, the session allows for securities lending and borrowing (SLB), all within this special trading hour.
Notably, the market has historically performed well during the Muhurat Trading sessions, with a positive trend observed in recent years. In 2022 and 2021, for instance, both the Sensex and Nifty reported gains of 0.88% and 0.49% respectively. This trend of positive returns has been consistent in seven out of the last ten Muhurat trading sessions, underscoring the potentially profitable and auspicious nature of investing during this time.
Samvat 2080: Outlook, Strategies & More
Samvat 2080 is of considerable importance in the Indian stock market, as it signifies the dawn of a new Hindu year, also known as Vikram Samvat, symbolizing a new beginning for investors. The Vikram Samvat calendar, based on lunar cycles, traditionally starts with the Diwali festival. Accordingly, Samvat 2080 aligns with the Diwali celebration of 2023 in the Gregorian calendar.
This year, with the onset of Samvat 2080 on November 12, there's a heightened sense of expectation among investors. Maintaining a well-diversified portfolio and adhering to regular portfolio rebalancing and proper asset allocation are key strategies for success in this new financial year.
Sharing his views, Kunal Ambasta, Co-founder and Chief Investment Officer at Liquide, told Reema Sharma of Zee Media, "India's economic prospects are relatively positive, supported by robust corporate earnings and a consistent growth forecast between 6-7%. Furthermore, inflation rates are projected to be stable, hovering around 5% for the foreseeable future. These conditions have been further validated by JP Morgan's decision to include Indian government bonds in its Emerging Market Bond Index, potentially driving $20-30 billion in foreign investments. Leading investment firms like Morgan Stanley, CLSA, and Nomura have also upped their investments in India, indicating a potential preference for Indian equities over those of other emerging markets. Additionally, the Nifty 50’s forward P/E ratio sits below its five-year average, indicating a potentially lower risk of downside."
Essential Tips for Participating in Muhurat Trading
Many traders and investors view the Muhurat Trading period as an auspicious time to invest. However, before you dive into trading during this session, here are some critical points to consider:
Monitor Market Volatility: It's important to closely watch resistance and support levels, as markets tend to be volatile during these sessions, often lacking a clear direction. As a day trader, focusing on these levels can guide more informed trading decisions.
Choose Liquid Stocks for Short-Term Gains: If you're aiming to capitalize on the session's volatility, opt for stocks with high trading volumes, given the limited one-hour trading window.
Adhere to Company Fundamentals: For long-term stock investments, stick to fundamental analysis. The excitement of the session often gives rise to rumours, so it's crucial to stay grounded in basic investment principles and align with your personal investment plan and risk tolerance.
Be Cautious, No Guaranteed Returns: Remember, investing during Muhurat Trading doesn't guarantee returns. A stock's performance on Diwali is not necessarily indicative of its future success, which depends on fundamental factors and broader macroeconomic conditions.
Settlement Obligations: Any open positions at the end of the Muhurat Trading session on November 12, 2023, will entail settlement responsibilities.
Prudent investment strategies are essential, invest wisely. Wishing you successful investing and a joyous Diwali!
Also Read: Unlock Prosperity This Diwali: Smart Investment Strategies for Indian Stock Market
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