An Extensive Guide to Muhurat Trading this Diwali

Guide to Muhurat Trading 2019

To mark the auspicious occasion of Diwali in the Indian stock market, the stock exchanges NSE and BSE have an exclusive Muhurat trading. It is a one-hour trading session. The time and date for the session is specified each year by the stock exchanges. This year, Muhurat trading is scheduled on the 27th of October. The timings for trading this year are 6:15 PM to 7:15 PM. This also marks the start of Samvat 2076.

But, how did Muhurat trading start and what is its significance? Here we share everything you need to know about Muhurat Trading in the share market in India.

Inception & Significance of Muhurat Trading In India

The word Muhurat means an opportune or auspicious time to start something. According to the Hindu astrology, the planets align them in a particular way at this time, which brings prosperity. Hence, when any new venture begins, or any fresh start happens in life, it is done so on a Muhurat time.

When it comes to share market trading, the concept of Muhurat trading is unique to Indian stock market only. It first started in the year 1957 on the BSE and later on in 1992 on the NSE. Indian stockbrokers use this hour to open the new settlement account of their entire clientele. This is done so expecting good returns for the rest of the year. This one hour is also the time when investors purchase stocks of good companies expecting long-term gains.

Muhurat Trading Significance

1. An Auspicious Day for Investment

As mentioned earlier, Muhurat trading is considered as an auspicious time for investments. To make a wise investment, it is advised to predict and understand the trading activity of the previous day.

2. Reliable Time for Beginners

Beginner or new investors can take advantage of this trading to start first and start small. Here you can experiment with the market and tray and understand its workings.

3. Reasonable Profit Prospects for Intraday Traders

A bullish trend is expected on the day of the Muhurat trading. Hence, many Indian stockbrokers buy and sell the stocks on the same day expecting good gains.

Muhurat Trading Investment Tips for Investors

1. Consider Consumption Companies

The implementation of GST has added one more layer of alpha to consumption companies. This is going to improve the allocation efficiency in the coming years. You can also look at sub-themes, such as rural consumption. The Minimum Support Price (MSP) is fixed at 150% of the production cost. Its benefits are extended to the Rabi crops as well. It is predicted that there will be a substantial shift in purchasing power.

2. Focus on Intra-Sector Differentiator

The intra-sector differentiator is when there are companies within the same sector that are performing on a different set of economics. This is the time to be meticulous and choose the stocks with utmost care.

3. Avoid Companies with A Careless Governance Standard

Since the last two years, SEBI has become more stringent with the governance standards of companies. There is no space for any laxity. Hence, it is advised to avoid companies that have a carless governance standard.

Before you start Muhurat trading, it is essential to note that you have a working trading and demat account. You cannot trade without these. Also, to make Muhurat trading easier, there are many Indian share market apps, that offer seamless trading experience and attractive brokerage plans.

Indiabulls Shubh is a trading app by Indiabulls Securities that offers you unlimited trades and zero brokerage plans. The fees charged are nominal of Rs 1,000 per month. The Indiabulls Shubh apps also offer zero brokerage plans on Equity trading, F&O trading and Currency trading. You can even start margin trading with zero interest. You get a free 30-day trial as well. So what are you waiting for? Use the app to get the hang of trades and prepare yourself for Muhurat trading this Diwali.

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