Muhurat trading: why Dalal Street opens for one hour on Diwali

The stock exchange is closed on Diwali, as it is on every major holiday, except for one hour. At a time chosen for its auspiciousness, the terminals light up, orders go through, and then everything shuts again until the next working day. The session is called muhurat trading, muhurat being an auspicious moment in the Hindu calendar, and it is the one hour of the year when the exchange openly admits that it is also a bazaar in the old sense, with the superstitions to match.

Where it comes from

The trading communities that built the Bombay market, Gujarati and Marwari families for the most part, kept their accounts by the Vikram Samvat calendar, whose year begins the day after Diwali. On Diwali evening, after the worship of Lakshmi, the goddess of wealth, a merchant family performed Chopda Pujan: the worship of the new account books, the long red cloth-bound ledgers that every shop opened fresh for the new year, with the words “Shubh Labh”, auspicious profit, written on the first page.

Brokers were merchants, and the exchange was their shop. So the BSE held a short Diwali session, by its own account from 1957, so that members could make the first entry of the new year’s books on the day itself. The NSE adopted the practice in 1992. In the days of the trading ring, brokers brought their families to watch; children were allowed on the floor for the only time in the year, and the first trade was a token, a single share bought to be kept rather than sold.

What actually happens

The exchanges announce the timing a few weeks ahead. For most of its history the session ran for an hour in the evening, usually around six o’clock, with a short pre-open before it. In 2025 the exchanges moved it to the afternoon, and the 2026 session, on Sunday 8 November, was scheduled for the afternoon too. There is no telling where it will sit in any given year, so check the circular.

The session is a complete miniature trading day. Orders match in the normal way, prices can move, and trades settle on the next working day under the usual rules, with the usual charges. Volumes are a fraction of a normal day’s and the moves are usually tiny. Most of the activity is sentimental: a small purchase of a share the buyer intends to hold, often a company with a family connection, often the same company every year, so that a demat account becomes a record of thirty Diwalis.

With the token purchase begins the new Samvat. Diwali in November 2026 opens Samvat 2083, and for the following twelve months market reports in the business press will count returns “for the Samvat” alongside the financial year, a habit that survives entirely because of this hour.

Does buying on muhurat do anything?

The record is cheerful and meaningless. In most years the indices end the muhurat session a little higher than they began, usually by well under a percent, which is what you would expect from a thin session in which almost everyone has arrived intending to buy. The outlier was 2008, in the middle of the global financial crisis, when the Sensex rose nearly 6 percent in the session, a move that said more about that October than about Diwali.

Over any horizon longer than the hour itself, whether you bought on Diwali or the following Tuesday has no measurable effect on your returns. If the ritual helps you start a habit, make the token purchase and then set up the monthly investment that actually matters. If it tempts you to trade in a thin, emotional session, remember the chart chapter on volume and sit it out.

Why it is worth keeping

The market spends 364 days a year presenting itself as a machine: order books, settlement cycles, circuit breakers, the vocabulary of this course. Muhurat trading is the day it remembers that it was built by families who prayed over their ledgers, that the first exchange in the country formed under a tree, and that “Shubh Labh” was written on the account books long before anyone computed a price to earnings ratio.

It is also, quietly, a lesson in the right order of things. The merchant families worshipped the books before they made the trade. Keep the records, respect the arithmetic, and then buy the share. Most of what goes wrong in investing is people doing it the other way round.

Session timings change each year and are announced by the NSE and BSE in advance. Check the exchange circular rather than relying on last year’s time.