What is Muhurat trading

A new year means a new beginning for many. The calendar year followed by the world indicates 1 January as the start of a new year. However, in a diverse country like India people follow different traditions each year.
For most Hindus, the New Year begins in the summer.  However, in Gujarati and Marwari traditions, it starts in Diwali.
India’s stock markets are dominated by brokers belonging to these two communities.  Hence, every year, Diwali assumes a special place for those in the stock market.
Here are few things to know about Muhurat trading:
·         Stock exchanges would open for trading at 6 pm on 3 November 2013 for Muhurat trading. The session lasts for an hour and a half. Muhurat means an auspicious moment to start something new. This is a tradition for over 100 years on the Bombay Stock Exchange and the mostly Gujarati and Marwari stock broking community. The session marks the end of the traditional financial year and the beginning of the new one.
·         People look at stock markets from a point of view of wealth creation. Stockbrokers execute token trades on behalf of their clients or their own account to mark the occasion. Stock exchanges and broker offices are decorated to seek blessings of Lakshmi, the goddess of wealth.
·         Chopda or Sharda Puja is performed. ‘Chopda’ is an account book. On the New Year day, you close your previous year accounts and start writing your financial statements in a new book. However, since most stock brokers are corporatized, accounts are no longer maintained physically. They are in electronic format. Also, for most companies in the business, the financial year starts on 1 April.
·         Typically, the trading activity on Muhurat trading is thin. Over the years, statistics from the Bombay Stock Exchange data (available since 1992) shows that the Sensex has ended in positive territory 7 out of 10 times. The average gain or loss is not more than one per cent. Transactions mostly have a sentimental value than any impact on the portfolio.

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