What is Muhurat Trading? Why Diwali is so important for share market traders and investors

Celebrated on the day of Lakshmi Puja, Muhurat Trading is believed to bestow wealth and prosperity

Muhurat Trading, the special Diwali trading session on Indian stock exchanges NSE and BSE, is a unique blend of financial, cultural, and spiritual traditions.

Celebrated annually on Diwali, this hour-long session marks the auspicious beginning of the Hindu financial year, or Samvat. Celebrated on the day of Lakshmi Puja, Muhurat Trading is believed to bestow wealth and prosperity. Traders see this as an auspicious day to initiate new trades, aiming to secure the blessings from Goddess Lakshmi -- the goddess of wealth, and Lord Ganesha -- the remover of obstacles.

Significance and spiritual roots

Celebrated on the day of Lakshmi Puja, this session is a tribute to Goddess Lakshmi. It is also the start of a new Samvat -- the Hindu calendar year established by King Vikramaditya in 57 BCE. For traders, it’s a fresh beginning on the auspicious night of Diwali, intended to set a positive tone for the coming year. Market participants, from retail investors to seasoned institutions, believe that trades made during Muhurat bring blessings of financial success.

Customs and traditions

The Diwali Muhurat session is filled with festive charm as brokerage offices transform into vibrant spaces, celebrating both culturally and financially. Desks are decorated with colourful rangolis (patterns made on the floor with coloured powders or flowers), rows of diyas (oil lamps), and marigold garlands. It’s common to see auspicious items, such as images of Lakshmi and Ganesha, framed and placed prominently, surrounded by incense and flowers.

Brokers often exchange sweets with colleagues and clients, and desks are brightened with tiny lights, creating a lively and auspicious environment.

In several brokerages and other offices too, employees come in traditional attire, adding to the festive air. Special rituals mark the day, with desks and trading stations treated as altars of wealth; pujas (prayers) are performed with offerings, and desks are sprinkled with turmeric or vermilion for good fortune. New ledgers are often sanctified with small swastikas, symbolising a blessed beginning.

Businesses and new ledgers

For many traditional brokerage firms, Diwali is also the day to start new account books, symbolising a fresh financial start. The ledgers are blessed as part of the Lakshmi Puja. This tradition harks back to a time before digital systems, where handwritten records were considered sacred.

Today, even though trading is mostly digital, many firms still uphold this ritual by ceremoniously marking their ledgers with turmeric, rice, and flowers. Some firms even begin the day by blessing computers, trading terminals, and account books as symbolic representations of their financial journey.

Traders also follow the tradition of making token trades to commemorate the beginning of a new Samvat. Even those who aren’t actively trading often make a small purchase or symbolic investment, believing it brings fortune for the year ahead.

Market sentiment

Muhurat Trading is marked by low volumes but strong positive sentiment. Many traders and institutions place small, symbolic trades rather than substantial investments, contributing to the festive atmosphere. Despite the modest trading volumes, the session usually sees gains, as optimism runs high during the Diwali celebrations.

Symbolic as it may be, Muhurat Trading has seen actual trends develop over the years, with stocks often closing on a positive note. It’s a ritualistic beginning that sets a hopeful tone for the coming year, encouraging traders to approach the future with optimism.

For those involved in India's stock markets, Muhurat Trading is not just about investments; it symbolises hope for the future. As traders offer prayers and light diyas on their desks, they are not just worshipping wealth but embracing a time-honoured tradition of optimism, prosperity, and continuity.