muhurat trading – Diwali’2013
The Indian capital markets will hold special 'muhurat trading' session for 75 minutes on November 3, between 6.15 pm and 7.30 pm. Buying stocks on muhurat trading, is considered auspicious by the trading community.
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. The traders on Dalal Street welcome the New Year on a positive note.
The offices of stock brokers are illuminated with diyas and lamps to welcome Goddess Lakshmi, the Hindu goddess of wealth and prosperity. The time of the Muhurat trading is specified by the national stock exchanges—Bombay Stock Exchange and National Stock Exchange. A nominal trading time is allowed. Usually, the Sensex closes on a higher note on the Muhurat trading day.
Muhurat means 'an auspicious hour'. According to the Hindu calendar, “Muhurat’ is considered as an auspicious time. It is believed that at the time of Muhurat, planets align themselves in such a way that the work done during this time becomes fruitful and without the influences of evil forces. Hence trading in the stock markets during the Diwali day at a specific Muhurat time is considered to bring prosperity and wealth. Trades made on this day are more for traditional, religious and sentimental reasons.
Along with the stock exchanges, commodity exchanges also have Mahurat trading for investors. For the business community, the new financial year begins with Diwali as they perform the 'Chopda or Sharda Puja' where old account books or ledgers are closed and new ones open marking the start of a promising new business year.
Whether veteran investors or newcomers, do remember to base your decision on sound research before you invest in stocks. Once you have traded, remember to stay invested in the medium to long term to ensure that you book profits from your holdings.
This is also an extremely good time to choose your financial advisor or broker to better discipline and achieve your financial goals. However, do pay heed to his advice to make the most of what the Indian markets have to offer.
The Economic Times spoke to leading broking firms on best stock investments for the coming year. Here is a list of their ideas:
Stocks | CMP | Target Price | Updates |
Infosys Technologies | Rs 3,324 | Rs 3,592 | Infosys has shown encouraging performance in its realisations in second quarter. The risk we hold to our argument is the sharp movement in the rupee, which may directly hit our earnings estimates. |
ICICI Bank | Rs 1,099 | Rs 1,201 | CASA mix at 43.2% is one of the best. In loan portfolios, ICICI faces lower risk from SME portfolio due to ~5% exposure of total portfolio. Corporate portfolio has been showing consistent performance. Management focus on stable growth with improving structural profi tability reinforces positive outlook on the stock. |
ITC | Rs 333 | Rs 398 | We expect ITC to witness 19.8% EPS CAGR over FY13-15. Since Budget will be delayed to June'14 due to polls, don't expect bad news in the next one year. We maintain 'Buy' with a nine-month target price of Rs 398 |
Idea Cellular | Rs 171 | Rs 200 | Idea Cellular has managed to increase its revenue market share to 16.2% in Q1 FY14. We expect the company to clock ~17%/50% revenue/EPS CAGR over FY13-15, while valuation at 7.4x FY15E EV/EBIDTA appears attractive. We recommend a 'Buy' on the stock with 9-12 month target of Rs 200 |
Bharti Airtel | Rs 359 | Rs 445 | Bharti may deliver revenue CAGR of 9% over FY13-16, led by improvement in traffi c and pricing, which will result in ~300 bps increase in EBITDA margins. All this will drive valuation to more like 9-10x EV/EBIDTA, which takes our target price to Rs 445. |
Sun Pharma | Rs 617 | Rs 725 | The company has the best margins and the best return ratios compared to its peers in the pharma sector. Thus, the growth prospects look strong from a long-term perspective. |
Colgate Palmolive | Rs 1,239 | Rs 1,450 | The company has increased its expenditure on advertisement and sales promotion which will clearly help to drive future growth. We believe that at CMP, Colgate offers decent margin of safety. We value the company based on FY15e EPS and assign the target price of Rs 1,450. |
Don't worry too much about the Sensex on muhurat day. A rise or fall in the benchmark index reveals very little about its full-year performance. Data gleaned from the past 12 years shows that the Sensex has ended in the red only on four occasions in the year following the muhurat trading. On eight other times, it has ended higher; in some cases substantially higher.
For instance on Diwali trading in 2012, the Sensex declined half a percent but the benchmark index has risen almost 10% since then. In 2010, the Sensex gained half a percent on muhurat day but declined 18% in the next one year.
In 2008, the benchmark index gained nearly 6% on muhurat and followed it up a whopping 92% gain in the following year. The picture is different for gold however. The price of gold fell fi ve out of 12 times on muhurat trading since 2001, but the yellow metal has given a positive return in each succeeding year since 2001.
source: http://articles.economictimes.indiatimes.com/2013-10-29/news/43495953_1_muhurat-trading-diwali-trading-sensex Source : http://economictimes.indiatimes.com/slideshows/investments-markets/best-picks-for-muhurat-trading/slideshow/24964474.cms source: http://www.indiainfoline.com/Markets/News/The-significance-of-Muhurat-trading-during-Diwali/5810958846
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