Muhurat Trading for Beginners: 4 Essential Tips

The country’s biggest festival – Diwali is around the corner. Employees look forward to this time of the year to have a sparkling time with their friends and family. The cash bonuses that most companies shower on their staff light up their homes, drowning them in festive exuberance.

Amid mirth and merriment, some news about Muhurat Trading will be common, flashing on smartphones and newspapers.

For those of you who are new to the term, Muhurat Trading is a ritual among Dalal Street investors and as a part of it, they trade during Diwali and on the day of Laxmi Puja. It also marks the beginning of the Hindu New Year.

Hindus consider it auspicious to buy assets like gold and stocks during this season.

The leading stock exchanges of India, National Stock Exchange, and BSE Ltd will facilitate trading by opening the market in the evening for about an hour. This year’s Muhurat trading is scheduled on October 19 from 6.30pm to 7.30pm. In case, you plan to try your luck, Entrepreneur India will give you four tips to rock it this Diwali, putting your trade during this auspicious hour.

The ‘Market’ Sentiment

Though Muhurat Trading is considered as auspicious and traditional investors will buy a couple of shares as a ritual, but trading will be just like any other day.

The market sentiment will be driven by international and domestic news along with announcements from India and global corporate giants. The so-called auspicious day has no say in driving the market forces. Hence, while playing your cards, keep your emotions at bay.

Bearish Diwali

As per the BSE Sensex data for the past five years, the market has plunged four out of five times. On the Muhurat Trading day in 2014, the Sensex closed on higher note, up by over 60 points to record 26,851.05. But do note that, this was same the year when Narendra Modi led-Bhartiya Janta Party came to power and was expecting economic reforms.

While last year, the Sensex opened at 28,066.32 points and closed about 100 points down, at 27,930.21. The NSE’s Nifty, which had opened at around 8672.35, closed at about 8625, down by over 45 points.

Having said, presently the market is very bullish. So, you never know the bearish trend might end here. 

Stay Put

Even though the indices are hovering around their record highs and Indian shares are doing decent this year, one must not forget that the economy is going through a bumpy ride.

The valuations of the stocks are too high and hence, pick your stock wisely and stay put, avoiding intra-day trading on this day.

The Midas Touch

And by any chance, you are looking at investment other than equity, consider investing in Gold Exchange Traded Fund (ETFs) or Sovereign Gold Bond (SGB) on Dhanteras, a day before Laxmi Pujan, which is considered auspicious to buy gold, the other such occasion being Akshaya Tritiya.

Both NSE and BSE have announced, via their respective circulars, that the exchanges will be conducting an extended live trading session for the trading of Gold ETFs and SGB only till 7 pm on 17 October 2017, on account of Dhanteras.

Additionally, you have a choice to invest in Gold Mutual Funds, which could be bought from any asset management company of your choice.

Written By

Vanita D'souza

Entrepreneur Staff

I am a Mumbai-based journalist and have worked with media companies like The Dollar Business Magazine, Business Standard, etc.While on the other side, I am an avid reader who is a travel freak and has accepted foodism as my religion.