Diwali 2022: Things to keep in mind as Indian markets open for Muhurat Trading

Traditions are closely linked to Indian values, and this also reflects in the way people conduct their business, trading, and everyday financial activities. From the demand for currency notes with 786 serial number fetching lakhs online, to pooja for electronics and traditional ledgers on Diwali, auspicious days and symbols are treasured. This is why the stock markets also open for an hour of trading, also called ‘Muhurat trading’, even on an important holiday such as Diwali.

Key strategies to experiment and make profits

This is a good time to invest firstly because it's an auspicious occasion, but beyond that the market sentiment is generally positive thanks to the festive euphoria. For new investors, it's a good opportunity to try out new stocks, which can experience growth during the festive season. For seasoned players, it's a way to buy for a week before Diwali, and book profits when the stocks surge during Muhurat trading. Many even follow an annual tradition of buying and selling within the same hour or on the very next day, to get lucrative returns thanks to festive cheer.

Need for well thought out decisions

Investors just need to focus on companies that have a good cash flow and are likely to make big bucks owing to festive demand, such as banks or retail brands. Another strategy can be to add just the right amount of gold to the portfolio for Muhurat session, as it experiences robust demand on Diwali. But caution needs to be exercise since there are rare occasions when markets have disappointed during the Muhurat hour as well. It might also happen that the initial excitement of Diwali might give way to a drop the very next day.

This is where investors must stick to their tried and tested strategies, while keeping risk appetite in mind, because it’s easy to get swayed by the festive euphoria that triggers a trading frenzy for the Muhurat window.