Muhurat trading is the auspicious stock market trading for an hour on Diwali. The old practice has been retained by the trading community, as the festival marks the beginning of the New Year. According to NSE, "Muhurat trading is the auspicious stock market trading for an hour on Diwali (Deepawali). It is a symbolic and old ritual, that has been retained and observed for ages, by the trading community. As Diwali also marks the beginning of the New Year, it is believed that muhurat trading on this day brings wealth and prosperity throughout the year."

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\Since the word "Muhurat" means an auspicious time to start something, Muhurat trading is considered special trading activity in the stock market held on the occasion of Diwali. It is held during evening hour and announcement in this regard is made by the stock market exchanges through a notification. The time for non-scheduled trading hour is not fixed as it changes every year. Many investors buy the stocks for long run on this occasion.

The Muhurat trading practice for an hour on Diwali is done traditionally to celebrate New Year. As Diwali marks the beginning of the New Year, traders believed that muhurat trading will bring in wealth and prosperity throughout the year. “Muhurat" is decided according to the Hindu calendar where auspicious planets align in such a way that the trading performed during this period becomes fruitful. As the marriages are solemised on a specific Muhurat, the trading in stock markets is done on the Diwali day at a specific time.

As per the tradition, trading on this day, when the 'Hindu financial year' begins, brings blessing for the year ahead. Notably, Gujarati community begins their new year a day after Laxmi Puja. This year, capital markets will hold special ‘muhurat trading’ session for 60 minutes between 6.16 pm and 7.15 pm. Brokers and investors will make token investments and usually hold the stock for a year or so.

Notably, stock exchanges are closed on October 28, therefore, settlement of trades executed on Muhurat trading will happen along with trades done on October 29. You can not sell the stocks bought during Muhurat trading on October 29. Out of the last 14 Muhurat trading sessions, BSE Sensex has settled higher for 11 times, and in the last Muhurat trading, the BSE Sensex climbed 0.7% to settle at 35,237, while Nifty added 0.65% to close at 10,598.

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