Muhurat trading is a tradition in Indian financial markets, wherein a one-hour special session is held on the day of Diwali when the new Samvat, the Hindu accounting year, begins. The new year day of Samvat 2080 falls on November 12, 2023.
Marking this auspicious start on the holiday, the Indian stock market will holds the special trading session called Muhurat (Hindi for auspicious time) trading. The equity markets will hold the Muhurat trading session from 6 pm and 7.15 pm on Sunday as the investor community prays to Goddess Lakshmi for wealth and prosperity in the coming year.
The BSE began the tradition of Muhurat trading in 1957 while the NSE followed suit in 1992. This includes a 15-minute pre-market session. While most people don't make serious financial investments on this day, many buy some stocks as a token to mark the auspicious occasion.
Block deal session
In the first phase from 5.45pm to 6pm, traders commit to buying or selling stocks at a fixed price and report it to the stock exchange.
Pre-market session
In the pre-market session, the stock exchange determines the opening price based on supply and demand. This will be held from 6pm to 6.15pm
Main trading window
This main part of Muhurat trading is this one-hour trading window when most of the transactions happen. This session will be conducted from 6.15pm to 7.15pm.
Call auction
During call auction, transactions of illiquid securities, which are not frequently traded, will occur. This will happen from 6.20pm to 7.05pm.
Closing session
In the final session from 7.25pm to 7.35pm, investors are permitted to place orders at a closing price.