The Dos and Donts of Samvat Trading

Last Updated: Tue, Oct 17, 2017 12:37 hrs
The BSE building is illuminated during the Diwali special trading session celebrating the annual Hindu festival of lights in Mumbai

Buying scrips during the Samvat trading, especially in the week of Diwali is not only auspicious, but delivery trades such during special trading times have resulted into a good trading year ahead.

Samvat 2073 was unique for India in various ways. The two disrupting events, namely, demonetisation and the introduction of GST impacted not only business sentiments but also tinkered with the GDP growth.

Our markets seem over-valued at this point of time, with Nifty trading at more than 25x PE (Price to earnings). In addition to the above, fiscal deficit numbers do not enthuse confidence; India's fiscal deficit in August-end touched 96.1 per cent of the budget estimate for 2017-18 vs 76.4% last year.

Overall, our macro environment has continued to strengthen and we believe that Indian economy should start doing well from the second half of this year.

It should be noted that reforms are not quick fix of the economy, but long term solution to our problems.

We have no doubts that our vibrant economy has potential to grow at 8-9% rate in the coming years. We continue to believe that we have rich demographics that can deliver this growth.

Consumption remains a key sector which has an immense potential in coming years. Government is planning to build 1.2cr affordable houses over the next five years which will create huge consumption demand.

After 2 consecutive good monsoons, we expect the rural economy to grow, which supports 70% of the India's population, thereby driving consumption. Together consumption, housing finance and infrastructure sectors are setting a stage for double digit growth in corporate earnings.

To sum up, even though Nifty is trading at all time high with PE around 25x, we are very confident about our economy to grow at 8-9% in the coming years and there is a huge potential for consumption, housing finance and infrastructure sectors. We feel that the investors should invest in quality stocks trading at attractive values to get good returns.

The auspicious hours on the BSE and NSE are as follows:

Trading highlights on the BSE

Pre-Open Session: 18:15 to 18:23
Muhurat Trading Session: 18:30 to 19:30
Block Deal: 18:30 to 19:05
Call Auction: 18:35 to 19:20
Post Closing: 19:40 to 19:50
Duration: 60 Minutes

Trading highlights on the NSE

Pre-Open Session: 18:15 to 18:23
Muhurat Trading: 18:30 to 19:30
Block Deal: 18:30 to 19:05
Call Auction: 18:35 to 19:20
Post Closing: 19:40 to 19:50
Duration: 60 Minutes

Here are a few dos and donts for trading this Diwali:

The Do's:

  • Buy defensive sector stocks viz pharmaceuticals, FMCG, consumer sector.

  • Buy stocks with inexpensive valuations , preferably stocks trading below 20 P/E ratio.

  • Buy stocks at the end of mahurat trading session , buy stocks which are liquid.

The Don'ts:

  • Don't buy hot expensive stocks.

  • Avoid real estate and capital goods sector.

  • Keep staggered buying (don't put all money right away keep some cash so that if the stock falls you can average it).

Besides the Dos and Donts, here are some hot stock ideas that you should keep handy for Muhurat Trading.

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