What is Muhurat Trading?

Muhurat trading, also called Mahurat trading, is an annual stock trading session, held only for an hour on Diwali day. Diwali is a Hindu festival and on this day Goddess Lakshmi, the bestower of wealth and prosperity is worshipped. It is also the first day of the Samvat Calendar. Traders and establishments in India traditionally considered the Samvat year to be the financial calendar. Though this is no longer the case, the practice of token trading and conducting nominal transacting on this day continues. Traders on Dalal Street, celebrate the occasion in their quintessential way by trading for a short while; Muhurat Trading hours are specified by the stock exchange.

Muhurat trading is a positive session where traders usually invest in long term shares which are expected to bring considerable profits. This is also the day traders invest in equity for their children. Selling at a profit is also a traditional practice in Muhurat trading sessions. The BSE Sensex is expected to close at higher levels than previous sessions. Muhurat trading is a glorious ritual that is retained despite the technological advancement of stock exchanges. While trading these days is largely online, most investors in India still look forward to Muhurat trading sessions with much solemnity.

When is Muhurtat trading today?

The close of trading session on October 22, 2014 – the last day of Samvat 2070, was on a positive note with the NIFTY (close at 7,995.90 points) gaining 68.15 points and the S&P BSE Sensex (close at 26,787.23 points) gaining 211.58 points over the previous session. The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) have announced the timings for the special Muhurat Trading on October 23, 2014 between 18.15 hrs and 19.30 hrs. While the exchanges are closed for regular trading on Diwali, the next day (October 24, 2014) is also a holiday for ‘Diwali Balipratipada’. The Forex and the Money markets are also closed on both days.

Will the Bull Run last?

The volatility of the past month has raised a major question in the minds of the investors “Will the bull run last?” A number of analysts believe that the Bull Run is here to last. More importantly, the industries and various sectors will stabilize. The efforts of the NDA government to boost manufacturing through the Make in India campaign when complemented by the labour reforms launched last week seem promising. If this is true, the index itself should go pretty high though an imminent correction of about 10 percent is also likely.

The fundamentals of the various sectors need to be strengthened according to market watchers. Reduction in inflation, expansion of economy, and reduction in the trade deficit (which the Finance Ministry is aiming to achieve with the RBI) should go a long way in consolidating India’s economic condition. A number of reforms and policy changes by the government are also expected in the future to facilitate such growth. The Union Budget of 2015-16 will also have a major role to play, say experts.

Top Muhurat picks

It is traditional for leading brokerage houses to issues long term stock tips to their customers. While these tips are subject to market risks, they are usually considered sound in the long run (a year or more). Here are some of the recommendations that have been issued this year by leading brokerage houses.

  • Infosys (recommended by Angel Broking and Kotak Securities) – Closing at 3796.05 (NSE) on October 22, 2014, Infosys has been a buzzing stock over the last fortnight. The scrip recorded an all-time high on October 13, 2014 even as Q2 results were announced.
  • UltraTech Cement (Recommended by ICICI Direct) – This scrip closed on October 22, 2014 at 2401.2 at the NSE. A strong growth in the Q2 earnings caused the stock to go strong and a number of brokerage houses have issued buy calls for the scrip.
  • State Bank of India (Recommended by ICICI Direct) – After having seen some very rough times in the past month SBI closed October 22, 2014 trading session at 2575.25 (NSE). The SBI central board has approved sub-division of equity shares for this scrip.
  • ICICI Bank (Recommended by Angel Broking) – For a long time a number of buy calls have been issued for this scrip without much upward movement. ICICI Bank closed October 22, 2014 at 1571 at the NSE. It remains to be seen what this Samvat year brings this stock.
  • Grasim Industries (Recommended by Kotak Securities) – Grasim Industries closed October 22, 2014 at 3392.90 (NSE). Having received a number of buy calls from leading market watchers over the past fortnight, Grasim’s performance over the next year will reveal the strength of these predictions.