Why the stock market trades for one hour on Diwali every year

This year, Muhurat trading will be held from 6.15 pm to 7.15 pm on Sunday.

Money Stock Market

Diwali is not only one of the most auspicious festivals in India, but is also known to be an extremely auspicious day for the stock market. Though the stock market is shut during the festival, there is a special one-hour trading session that takes place on Diwali.

Muhurat trading

Called Muhurat trading, this one-hour session marks the beginning of a new year, called ‘Samvat’. It is believed that trading on this day propitiates Goddess Lakshmi, the goddess of wealth and prosperity, and thus brings wealth and prosperity throughout the year.

The special trading session takes place during the most auspicious hour of that day.

Prior to the special trading session, stockbrokers are also known to worship their account books at the stock exchanges. This worship is called the ‘Chopra Pooja’.

This was first started on the Bombay Stock Exchange back in 1957, where traders mainly buy stocks that they want to bet on. So, every year on the day of Muhurat trading, the Sensex usually ends higher, in the green. In 2018, the Sensex went up by 0.7% and ended at 35,237, while Nifty rose 0.65% to close at 10,598.

This year, Muhurat trading will be held from 6.15 pm to 7.15 pm on Sunday. And this will be Samvat 2076.

According to an Economic Times report, this year, analysts expect that Sensex will top the 46,000 level by next Samvat, while the Nifty will cross the 14,000 mark.

Speaking of stocks, brokerage house Centrum Capital has recommended ICICI Bank and L&T as the ‘top Muhurat session picks’.

According to Centrum Capital, on a standalone basis, ICICI Bank can achieve 1.5 per cent ROA and 15 per cent ROE by FY21E.

Other top stock picks are Page Industries, Prestige Estates and VIP Industries.