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Mahurat trading(also pronounced Muhurat) is the stock market trading activity for an hour on the auspicious occasion of Diwali (Deepawali), the biggest festival for Hindus. This derives from Gujarati culture(who are most dominant people in Dalal Street) who do similar trading on hours of Diwali.
Muhurat trading in the stock market happens for about an hour on Diwali day. Usually, this trading session is held in the evening. It is a symbolic ritual which has been performed for years.
Stock brokers' offices take on a distinctly ethnic look with neatly designed rangoli patterns and innumerable diyas lined up to welcome Goddess Lakshmi. Muhurat trading is one of the many links the broking community retains with its rich past. The practice of muhurat trading has been retained and observed for ages. The time of the muhurat trading is specified by the stock exchange. A nominal trading time is allowed. Usually, the Sensex closes on a higher note on the muhurat trading day.
With this, the traders on Dalal Street welcome the New Year on a positive note. The traditional muhurat trading on the day of Diwali still retains much significance for many traders. Many start the New Year with traditional ceremonies and pujas.
Muhurat trading is traditionally an occasion for an auspicious beginning to the traditional New Year. Investors place token orders and buy stocks for their children, which are held for the long term and sometimes never sold. Traders normally book their intra-day profits, however small they may be.
For the trading communities of the north India, the new financial year begins with Diwali. That is the reason puja is performed to accounts books and safes on Dhanteras as well as on Diwali day. A coin - which signifies wealth - is placed on the account books before the puja. Stock brokers perform 'Lakshmi Puja' at the exchange and the customary muhurat trading takes place, where the Sensex invariably notches up a few points even in a bad market. It is believed that on the night of Lakshmi Puja, the Goddess comes to reside at the place of the puja. That is the reason why the traders and shopkeepers stay awake with lights burning all night.
As Diwali also marks the beginning of the New Year, it is believed that muhurat trading on this day brings in wealth and prosperity throughout the year. An auspicious beginning is thus made on the first day of the year.