Muhurat Trading Explained: What It Is, Why It Exists, and Whether It Matters to a Fund Investor

Muhurat trading is a short special stock-market session held on Diwali, a day many people consider auspicious for starting new investments. For mutual fund investors, however, it does not create a special NAV or return advantage. Regular mutual fund orders still follow the usual business-day, cut-off and fund-realisation rules.

Diwali is considered an auspicious time of the year. Many people use the occasion to buy something new, start a business or make an investment. The Indian stock market marks this tradition with a special Muhurat Trading session every Diwali.

But does this festive trading window matter if you invest through mutual funds? This article explains how Muhurat trading works and what it means for mutual fund orders, NAVs, and SIPs.

The word “Muhurat” refers to an auspicious period in Hindu tradition. The Muhurat Trading session in the stock market marks this auspicious time window. 

Diwali is an exchange trading holiday. However, every year, the BSE and NSE hold a special short trading session on Diwali (on the day of Laxmi Puja). This session is called the Muhurat Trading session. 

Here are some other important details you should understand about Muhurat Trading:

• It is held once a year on Diwali.
• The session is much shorter than a regular trading day.
• Investors can trade in eligible securities like shares, currency derivatives, commodity derivatives, and other securities, subject to exchange rules.
• The specific timing for this session can change from year to year.
• The importance of this session is more cultural and symbolic.
• Trading during Muhurat doesn’t guarantee profits or better returns.

Muhurat Trading happens to because Diwali is believed to be auspicious. Diwali marks the beginning of a new Samvat year. Business families had the tradition of closing their old account books and open new ones around this time. The occasion is also linked with Chopda Pujan, when account books are worshipped during Lakshmi Puja.

This is why Muhurat trading happens every year, even though there is a stock market holiday on Diwali. For many stock market investors, the session is a symbolic way to:

• Begin the new Samvat year with an investment
• Follow a long-standing family or market tradition
• Make a small investment on an auspicious occasion

Muhurat trading was first introduced by BSE in 1957, while NSE began it in 1992.

The Muhurat trading 2026 timing has not yet been announced by NSE. The exchange has, however, confirmed the date.

NSE's 2026 calendar states that Muhurat trading will happen on Sunday, 8th November 2026, with the timings to be notified separately. You can look for NSE circulars closer to Diwali to check for the exact Muhurat Trading 2026 timing announcement.

While Muhurat Trading is believed to be a culturally significant observance for those who trade directly in equities, it does not matter significantly for mutual fund investors.

Here’s why Muhurat Trading may not matter much for mutual fund investors:

1. There is no special Muhurat NAV

Mutual funds are not bought at the live market price you see during the Muhurat session. Your units are allotted at the NAV applicable based on the usual cut-off and fund-realisation rules.

Therefore, placing an order during Muhurat trading does not give you a special NAV, a discount, or any pricing benefit just because it is Diwali.

2. Diwali orders still follow normal processing rules

A stock order placed during Muhurat trading can be executed within that session, so investors may take advantage of the prices, liquidity, and trading activity available at the time.

Mutual fund orders do not work that way. You invest an amount, and units are allotted later at the NAV that’s applicable based on cut-off and fund-realisation rules. So an order placed on Diwali does not benefit directly from the Muhurat session itself.

3. The session does not change your fund

A short Diwali trading session does not change the core fundamentals of the scheme (fund’s investment strategy, portfolio, expense ratio, or the way it is managed). It also does not have an impact on long-term compounding, underlying asset quality, and overall long-term fund performance. 

Unlike regular mutual funds, ETFs and listed close-ended funds trade on the stock exchange, so they can be bought or sold during Muhurat trading at the available market price just like regular shares.

But even then, Muhurat trading may not matter much and may potentially cause:

• Liquidity can be lower: A short trading session may mean fewer buyers and sellers, which can lead to wider bid-ask spreads.
• Market price can differ from NAV: ETFs may trade above or below their NAV, while listed close-ended funds can also trade at a premium or discount depending on demand and supply.

While you can place mutual fund orders, they won’t be processed on Diwali as this day is a mutual fund trading holiday. Here’s what happens to if you place a new order on Diwali or have an existing SIP debit date on Diwali:

While Muhurat Trading may not matter much for fund investors in terms of portfolio returns or long-term wealth creation, the following factors do:

• Maintaining SIP consistency: Continuing your SIPs through market ups and downs may be more important than trying to invest on a particular day.
• Asset allocation: Ensuring your asset allocation in equity, debt, hybrid, and other securities matches your risk tolerance and time horizon is more important. 
• Fund fundamentals: Considering factors like the fund’s portfolio concentration, investment objective, rolling returns, expense ratio, etc. may matter more than investing on Diwali alone.
• Periodic reviews: Checking your portfolio periodically and rebalancing if needed is important to keep it aligned to your goals and risk comfort.
• Time in the market: Staying invested in the market for your planned time horizon may matter more for long-term investing than picking an ‘auspicious’ day to invest. 

Muhurat trading is a Diwali tradition in the stock market. It may be a special occasion to invest for some people, but it does not give mutual fund investors any special NAV or return benefit.

For mutual funds, the usual things still matter more: your goal, the fund’s risk, costs, and how long you plan to stay invested.

1. What is Muhurat Trading and when is it in 2026?

Muhurat Trading is a unique and special stock-market session conducted on Diwali. It is held every year on Laxmi Puja, as this time is believed to be auspicious and people believe that investments or trades made at this time bring prosperity for the rest of the year.

For 2026, Muhurat Trading will be conducted on Sunday, 8th November, 2026. The specific timing has not been announced yet. 

2. Can I buy mutual funds during the Muhurat session?

You may be able to place a mutual fund order online during the Muhurat trading session if your AMC or platform accepts it. However, regular open-ended mutual funds do not execute during that one-hour window. The order is processed according to the applicable business-day, cut-off and fund-realisation rules.

3. Which NAV applies to a purchase made on Diwali?

There is no special Diwali NAV for mutual funds. If Diwali is a mutual fund holiday, an order placed that day is treated as a holiday order. The NAV applicable for the order will generally be that of the next business day, provided the purchase amount reaches the fund house before the relevant cut-off time. So, Muhurat trading does not change the NAV rules for regular mutual fund purchases.

4. Do markets actually rise during Muhurat trading?

There is no guarantee that markets will rise during Muhurat Trading session. Historical sessions have often closed higher, but there have also been negative years (source: Economic Times). Muhurat trading returns history should therefore not be treated as a prediction of what the market will do in 2026 or afterwards. 

5. Is the mutual fund cut-off time different on a special session day?

No. There is no special mutual fund cut-off is created simply because the stock exchanges hold Muhurat trading. Normal SEBI cut-off and business-day rules continue to apply.

6. Is Muhurat trading a good time to start an SIP? 

You can start an SIP on Diwali, but Muhurat trading does not give you any special return advantage. Pick an SIP date that works with your salary or regular cash flow and suits your investment plan. 

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