Diwali Muhurat trading 2026: Can one special session make a difference to your investment returns?

Muhurat trading is considered an auspicious occasion for investors to begin their financial journey during Diwali. But does a positive close during the special stock market session signal stronger returns in the days, months or year ahead? Historical market data from 2006 to 2025 provides a starting point for examining this belief, although it does not establish a reliable predictive pattern.

The question assumes greater significance amid heightened market volatility. On Wednesday, the Sensex fell sharply from its morning high, while the Nifty slipped below 22,700 in afternoon trade as rising crude oil prices and profit-booking weighed on investor sentiment. The India VIX, which measures expected market volatility over the next 30 days, rose 8.26% to 16 from its previous close of 14.77.

What does 20 years of Muhurat trading data show?

Historical data for the 20 Muhurat trading sessions between 2006 and 2025 shows that the Nifty 50 closed higher in 14 sessions and lower in six. Positive closes were therefore more frequent than negative ones during the period.

The strongest session was in 2008, when the Nifty gained 6.35% and the Sensex rose 5.85%. At the other end, the Nifty fell 0.63% in 2017, while the Sensex declined 0.59%. Most sessions recorded relatively modest movements, with changes generally remaining within 1%.

These figures indicate that the Nifty has more frequently ended Muhurat trading in positive territory. However, the direction of a single session does not establish whether investors subsequently earned 

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Can a positive Muhurat close predict future returns?

To determine whether Muhurat trading has predictive value, investors would need to compare each session's closing performance with subsequent Nifty returns over defined periods, such as one month, six months and one year.

Researchers could examine whether positive Muhurat sessions were followed by stronger average returns than negative sessions. They would also need to compare those outcomes with the market's broader historical performance to determine whether any apparent relationship was statistically meaningful.

The historical session-level figures alone cannot establish such a relationship. Interest rates, corporate earnings, valuations, foreign investor flows and geopolitical developments can influence market performance long after the special session ends.

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Crude oil and profit-booking weigh on markets

Wednesday's sell-off illustrates how quickly broader market conditions can overshadow short-term sentiment. Brent crude rose above $110 a barrel amid concerns about disruptions to Red Sea shipping and threats to oil infrastructure in Saudi Arabia. Remarks by US Secretary of State Marco Rubio about the difficulty of reaching a peace deal with Iran added to concerns over energy supplies.

Profit-booking in banking, capital goods and automobile stocks also dragged the market lower, while information technology shares were among the exceptions to the broader weakness.

At 2:13 pm, the Sensex was down 510 points at 73,351, while the Nifty had lost 200 points to 22,687. The sharp intraday reversal highlighted the influence of global cues, crude prices and sector-specific selling on investor sentiment.

What should investors do during Muhurat trading?

Investors can participate in Muhurat trading as part of their festive tradition, but decisions should remain anchored in financial goals, risk tolerance and investment horizon.

A positive close should not automatically trigger additional equity investments, just as a negative session should not be treated as a signal of prolonged weakness. For long-term investors, diversification, asset allocation and business fundamentals are generally more relevant than the direction of a single session.

Ultimately, the 20-year record shows that positive Muhurat closes have been more common than negative ones. Whether these gains predict future market returns requires a separate analysis of subsequent performance. An auspicious start may carry cultural significance, but it is not a substitute for an investment strategy.

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