The Sensex rose 335 points (0.42 percent) while the Nifty 50 was up 94 points (0.39 percent) during the hour-long 2024 Muhurat trading from 6 pm on Friday, November 1. While both indices were in the green, they had not seen a rate of increase this low since 2019, when the Nifty rose 0.37 percent. The Sensex was up 0.49 percent that year.

The Sensex rose 0.45 percent in 2020, 0.49 percent in 2021, 0.88 percent in 2022, and 0.55 percent in 2023. The Nifty 50 rose 0.47 percent, 0.49 percent, 0.88 percent, and 0.52 percent respectively in those years.

The small rise brought some smiles to traders who have seen the Sensex lose around 5,000 points in October alone. That drop is being attributed to — among other factors — foreign investors pulling out around $11.5 billion from Indian markets in October alone.

Several other factors — including a lower economic growth outlook — also appear to have affected the lower-than-earlier growth of the indices.

What is Muhurat trading?

Muhurat trading is the stock trading that occurs on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on the occasion of Diwali.

The exchanges usually remain closed because it is a national holiday, but open for an hour of trading at an auspicious time: the Muhurat.

The reason is that Diwali — the Hindu festival of lights — also marks the beginning of the financial year of the Samvat, which is a Hindu calendar that runs 56-57 years ahead of the Gregorian calendar.

It may be noted that the calendar year of the Samvat actually begins in April. Diwali only marks the beginning of the financial year.

It may also be noted that while Diwali was celebrated on October 31 this year, the stock exchanges chose to mark the occasion the day after.

What dampened sentiments?

Journalist and author Prasanna Mohanty told BTI over the phone before the Muhurat trading even began that one reason the rise might not be as high as the previous years was that foreign investors withdrew more than Rs 1 lakh crore ($11.5 billion) from Indian markets in October alone.

And it happened. Having led to a bear run on the markets throughout the month gone by, the outflow continued to weigh heavy on the minds of those still invested in the market.

Mohanty, also an economic commentator, posited that another reason for the underperformance could be a Union Ministry of Finance report released on October 28, which pegged the Indian economy's annual growth rate for the 2024-25 fiscal at 6.5-7 percent.

Notably, India's growth rate for FY2023-24 was 8.2 percent, significantly higher than the projected rate for the current fiscal.