Muhurat trading: Experts favour selective buying as markets near resistance

• Analysts recommend selective buying during Sunday’s Muhurat session, warning that thin liquidity could magnify market swings.

• Motilal Oswal puts Nifty valuations below their historical average, while small-cap stocks remain at a premium.

• With benchmarks nearing resistance levels after a rally, experts advise investors to focus on earnings, valuations and long-term goals.

Investors should approach Sunday’s Muhurat trading session with selective purchases and restrained trading, market experts said, as benchmark indices near key resistance levels following a recent rally.

The special Diwali session marks the start of Samvat 2083 and is traditionally associated with fresh investments. Analysts, however, cautioned that the occasion should not override an assessment of company fundamentals, valuations and financial goals.

They recommended that long-term investors use the session to review their asset allocation and consider measured purchases of financially sound businesses. Short-term traders should assess technical levels and global developments before taking positions.

Limited liquidity during the shortened session could exaggerate price movements, making large orders and aggressive bets particularly risky, experts said.

Motilal Oswal Financial Services said Nifty was trading at 17.5 times forward earnings, approximately 16 per cent below its long-term average. Small-cap stocks, by contrast, continued to command a premium of about 25 per cent to their historical average.

The brokerage expects corporate earnings growth to strengthen. It projects Nifty earnings per share to increase by 16 per cent in FY27 and 14 per cent in FY28, compared with growth of 5 per cent in FY26.

For Samvat 2083, analysts identified banking and financial services, capital markets, manufacturing, global outsourcing and exports, consumption and digital businesses as areas of interest.

They also highlighted opportunities across healthcare devices, aerospace, auto components, pharmaceutical ingredients, garments, port cargo, organised jewellery and quick-commerce platforms. Stock selection within these segments should remain guided by business prospects and valuations, they said.

New investors were advised to begin with modest amounts and a long holding period, choosing companies for their financial strength rather than purchasing shares solely to mark the auspicious occasion.

For the Muhurat session itself, experts expect largely range-bound trading or consolidation, with both benchmark indices approaching resistance zones.

With Nifty trading around 24,600, analysts placed immediate support at 24,350 and resistance between 24,700 and 24,800.

After six consecutive sessions of gains, some investors could book profits. Geopolitical tensions, fluctuations in crude oil prices and weakness in overseas markets could also influence sentiment, analysts said.

Their advice was to treat Muhurat trading as an opportunity for a considered portfolio review, with purchases aligned to investment goals and the ability to withstand market fluctuations.

With IANS inputs