Muhurat Trading Returns: Is the Auspicious Diwali Hour a Profitable Bet?

Copyright © HT Digital Streams Limited All rights reserved. The customary evening time for Muhurat trading has been shifted to an afternoon window this year. Summary Dalal Street’s auspicious hour moves to the afternoon for the first time in decades, sparking optimism and debate. Muhurat deals are for long-term faith, but data shows that Diwali shine also belongs to gold and not just stocks. Every Diwali, the Indian stock market interrupts its usual rhythm for a unique, symbolic event: Muhurat trading. It is a special one-hour Diwali session on the stock exchanges that marks the ceremonial start of the Hindu financial year under the Vikram Samvat calendar. Traditionally linked to chopda pujan (worship of account books), it has evolved into a valid trading window with settlements and deliveries. This is an hour where investors not only trade – they seek the blessings of Goddess Lakshmi, believing that transactions carried out during this auspicious time will bring luck, prosperity and positive returns. A historic shift marks the Muhurat trading session in 2025: the customary evening timing has been moved to an afternoon window. But does this belief in favorable timing actually translate into positive market returns? A currency analysis of the past 28 Samvat years (1997–2024) shows that the Sensex has closed higher in 22 Muhurat sessions, reflecting the customary Diwali optimism. However, volumes are often lower, with a median return over these years of -0.42%. But the glow after Diwali fades fast. In the very next session, markets turned red about two-thirds of the time. The pattern highlights that while Muhurat trading boosts sentiment, it dissipates the next day. Profits can sometimes reverse shortly after Muhurat trades, but retail investors typically approach this day with a long-term mindset, says Sachin Jasuja, head of equities and founding partner at brokerage Centricity WealthTech. “Muhurat trading is largely symbolic – it does not define market fundamentals. The broader market is driven by corporate earnings, their quality and growth trajectory, rather than short-term buying or selling by retail investors or FIIs.” Muhurat trading has become a barometer of investor sentiment. “The spirit of Muhurat is not meant for speculative flurry,” emphasized a note by brokerage firm Samco Securities. “Ideally, trades placed during this session should be held for weeks or months to benefit from compounding and positive sentiment over time.” To make the most of the Muhurat session, investors should pick stocks with strong fundamentals and take a long-term approach is recommended. “Favor large-cap or blue-chip stocks with adequate liquidity, stable earnings histories and reasonable valuations. Avoid hyper-volatile, illiquid mid/small-caps unless you have conviction and risk appetite,” Samco noted. To really capitalize on the auspicious spirit of Muhurat trading, experts emphasize that the session is more about strategic entry, and not speculative exit. While FII and IPO activities and sale of promoter stakes remained high, long-term investors are continuously absorbing this supply, Jasuja added. “This reflects a structural shift towards financialization of household savings. For such investors, Muhurat trading remains a meaningful tradition focused on long-term wealth creation, while any short-term reversal often results from short-term participants, including FIIs, booking quick profits.” Dhananjay Sinha, CEO and co-head of institutional equities at brokerage Systematix Corporate Services, feels that the Diwali trading event has become a customary tradition. “However, markets are driven by numerous variables, including fundamentals, capital flows, and the interplay of global and domestic policies. These factors have a simultaneous impact, reducing the relevance of the Diwali event.” Long-term brilliance This brings back the ultimate debate. As India enters Samvat 2082, the year-to-date outperformance of precious metals over equities has sparked the familiar Dalal Street question: Should investors prioritize gold or equities? Gold and silver shine brighter than stocks this Diwali. An in-depth analysis of 25 Samvat years by Mint confirms that while equities remain the dominant long-term wealth creator, gold and silver often tend to outperform during volatile or uncertain years – a pattern clearly visible this year. Over these 25 years, the 30-scrip blue-chip index, Sensex, has only managed to outperform gold and silver in nine Samvat periods. Individually, the Sensex was eclipsed by gold and silver a total of 14 times each. Within the metals, gold outperformed silver by 11 times. The current disparity is stark: gold is up 52% ​​year-to-date and silver is up 55%, dramatically dwarfing the front-line index’s modest 5% year-to-date gain. While gold’s exceptional rally this year has been supported by strong central bank purchases, rising geopolitical tensions, and economic uncertainty driven by tariffs and rate cut expectations, silver is red-hot amid a global supply squeeze. “Cash flows have definitely shifted from riskier to safe haven assets amid the move and volatility,” said Manav Modi, analyst – precious metals at Motilal Oswal Financial Services. “On a year-over-year basis, gold and silver have outperformed most asset classes. However, diversification remains key – investors should ideally allocate at least 10% of their portfolio to these metals, depending on risk appetite and investment horizon.” Meanwhile, experts also warn against taking exposure to gold at current high prices and suggest going into dips. Get all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. 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