Muhurat Trading Returns
Muhurat Trading is a special one-hour trading session conducted by NSE and BSE on Diwali evening to mark the auspicious start of the Hindu New Year (Samvat); historical return data showed that the Muhurat session itself and the subsequent twelve-month period often — though not always — produced positive equity returns.
NSE and BSE have jointly conducted the Muhurat Trading session annually on the evening of Diwali, typically between 6:00 PM and 7:00 PM IST. The session has cultural and religious significance, with investors traditionally making symbolic purchases believed to bring prosperity. Volumes during the session were modest compared to regular trading days, but participation from retail investors and HNIs was historically high relative to session length.
Data compiled from Muhurat sessions across the period 2010-2023 showed that the Nifty 50 closed positive in the majority of Muhurat sessions — approximately 70-75% of years ended with gains during the one-hour session itself, though the magnitude was generally small. The session was characterised by low volatility, positive bias driven by ceremonial demand, and limited institutional activity.
More substantively, analysts tracked the performance of Indian equities over the twelve months following each Muhurat session — from one Diwali to the next — framed as the Samvat year performance. Historical data showed that Samvat years beginning after a period of market correction or moderate valuation tended to produce stronger returns than those beginning after a prolonged bull run. Samvat 2075 (2018-19) and Samvat 2076 (2019-20) were challenging years, while Samvat 2077 (2020-21) and Samvat 2078 (2021-22) were exceptionally strong, reflecting the post-COVID recovery.
The starting valuation at Muhurat — captured via Nifty 50 PE and PB ratios — had historically been among the better predictors of Samvat year returns. When Muhurat occurred at elevated valuations (Nifty PE above 22-23x), subsequent twelve-month returns were below the long-run average. When valuations were moderate (PE below 18x), subsequent returns were above average. This was consistent with mean-reversion dynamics rather than any Diwali-specific causation.
NSE and BSE published the Muhurat Trading session details and timings annually. SEBI oversight ensured the session followed normal trading rules, with circuit breakers and surveillance active during the session. The session served both as a cultural touchstone for Indian equity investing and as a natural checkpoint for annual portfolio reviews.