Happy Diwali folks! In India, there has been a long standing tradition of trading on the day of Diwali, usually in the evening after Lakshmi Puja is done. This trading window is called Mahurat Trading. This year Mahurat Trading will take place on 14th November from 6:15 – 7:15 PM. Let’s have a look at this tradition and see if its an apt time for a new trader to enter or a new long term investment to be made.
Crux of the Matter
What is Mahurat Trading?
The word Mahurat in Sanskrit means an auspicious day or time as per the Hindu calendar. It is believed that during this time, planets align themselves in a pattern considered auspicious. Most of the traders trade during this time for religious, sentimental, and traditional reasons.
As on the day of Diwali people also do Lakshmi Puja, Mahurat Trading is said to be an auspicious day that brings wealth the whole year. This ritual is followed by the trading community for years. This happens on the day of Diwali every year and the time for the same is notified by exchanges every year. The trading session is generally held during the evening.
History Of Mahurat Trading
This ritual started in 1957 at the Bombay Stock Exchange. At that time, Hindu traders used to celebrate this auspicious day of Lakshmi Puja and mark the start of “Naya Samvat” (New Year). Back in those days when there were no electronic ways of trading, people used to gather at the BSE trading ring for an hour or so to trade (some of you would have seen that in the series 1992 Scam of Harshad Mehta).
On this day, jobbers (people who traded for a broker) were also allowed to bring in their friends, family members, and clients to show how trading happened at the BSE. Sweets were exchanged among everyone and that day used to be one of the most awaited days. Jobbers used to believe that buying a share on Diwali would bring a lot of luck in that share and that it would give you handsome returns, multiplying your wealth.
Some Other Things To Know About Mahurat Trading
1. Propitious day to invest: It is believed to be one of those auspicious days to invest in the market for long term in good companies that can provide high returns. (Note: One should also check the market sentiments in the past few trading sessions to have a better idea of what to expect when the markets open on Mahurat).
2. Opportunity for new investors: Once a newcomer has gained knowledge about investing and trading, Mahurat Day is considered an auspicious day to enter the markets.
3. Good for Intraday profits: Good for Intraday profits: As many traders feel that this is an auspicious day and markets will remain bullish, intraday traders see this is as a good day to trade and book profits.
What Can We Expect This Year?
Due to Covid-19 pandemic, first half of this year has seen a lot of pessimism in the stock market. But sentiments of market participants across the globe have been positive after Joe Biden won US elections and Pfizer’s vaccine news. Mahurat Day may be one of those days to be full of optimism and can see a good up-move in India’s stock market.
This piece was a collaborative effort with FinMedium. It can be found on Instagram at @finmedium and here.
- Lakshmi is one of the principle goddesses in Hinduism. She is the goddess of wealth, fortune, love, beauty, joy and prosperity. It is believed that on the night of Lakshmi Puja, the Goddess comes to reside at the place of the puja during which the traders and shopkeepers stay awake with lights burning all night.
- The Marathi word dalāl means “a broker”. Similar to Wall Street in New York City, Dalal Street is often used as a metonym for the entire Indian financial industry.
- The Phiroze Jeejeebhoy Towers, popularly known by its original name of BSE Towers, is a 29-storey building in downtown Mumbai on Dalal Street. The building is owned and occupied by the BSE. BSE has secured a trademark for its iconic building.