What is muhurat trading? and How muhurat trading started?

Economics 14 November 2020 3:53:PM

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What is muhurat trading?

Muhurat, which means auspicious time, is a Hindi word measured on the basis of favorable planetary and star alignments. For Hindu astrology, muhurats are significant. Muhurat trade has been organized by stock exchanges in India for a long time. It is an annual ritual that everyone is looking forward to.

 

Trading in Muhurat typically occurs in the evening. Stock exchanges declare a special one-hour trading session during which, to mark the beginning of a new financial year, Hindu traders and investors participate in the purchase and sale of stocks. They assume that during the year it gives them good luck and happiness.

 

History of muhurat trading:-

 

For the Gujarati and Marwari communities in India, the two most prominent business communities, the day is of tremendous significance. For them, the session marks Samvat, or the new year. They're closing the old ledgers, opening the new ones. During the Samvat trade, several individuals participate in stock trading and investment. The Diwali special trading session lasts for an hour, and the next day the market remains closed.

 

It was organized for the first time in 1957 by the Bombay Stock Exchange. The legacy continued with NSE and other exchanges, and muhurat trading began at NSE in 1992.

 

The new year has been marked by bringing in new books of records known as “Lidha-Didha” or “Len-Den” and closing out the reconciliation of the earlier year.

 

The earlier Samvat 2076, for the NIFTY, started @ 11305 (11.10.2020) and has ended on12720 (13.11.2020), that’s a rise of 1415 or 12.5% point to point. The Samvat has been pretty volatile as it dealt with a correction of 40% from 12430 (20.1.2020) to 7511 (24.3.2020) in the first half, while the second half saw a gradual recovery to take out the earlier top.

 

So, investing in the stock market, big transactions, token investments, or first-time purchases are a great day. It's necessary not to get carried away and buy overvalued stocks, however. Although cultural and religious opinion has a role in the decision-making process of an investor, it is important for success in the stock market to undertake a sound financial analysis in advance.