List of holidays falling on Saturday/Sunday
In addition to the above list, the following stock market holidays will fall on Saturday or Sunday in 2024:
Holidays
|
Date
|
Day
|
Dr. Baba Saheb Ambedkar Jayanti
|
14-Apr-2024
|
Sunday
|
Shri Mahavir Jayanti
|
21-Apr-2024
|
Sunday
|
Ganesh Chaturthi
|
07-Sep-2024
|
Saturday
|
Dussehra
|
12-Oct-2024
|
Saturday
|
Diwali-Balipratipada
|
02-Nov-2024
|
Saturday
|
The Muhurat trading
For the uninitiated, ‘Muhurat trading’ is a special one-hour trading session. It is conducted by the BSE and NSE on the occasion of Diwali. This session marks the beginning of the Hindu New Year, known as Samvat.
In 2024, Muhurat trading will take place on Friday, November 1, 2024. The timings for Muhurat trading will be announced by the exchange in due course.
What is the trading schedule of NSE?
On weekdays, the share market timing of NSE is between 9:15 AM and 3:30 PM. There is a pre-open session from 9:00 AM to 9:15 AM. Furthermore, there are also two block deal sessions:
- Session I from 8:45 AM to 9:00 AM
and
- Session II from 2:05 PM to 2:20 PM
What is the ‘holiday effect?’
The ‘holiday effect’ is also known as the ‘holiday rally.’ This term highlights a situation where stock prices surge and experience a positive trend or rally during the period surrounding certain holidays. For example,
- Ahead of Diwali and Dussehra, several investors engage in buying activity
- They prefer investing in stocks as a means of seeking blessings or prosperity
- This preference increases demand for stocks and pushes the prices higher
However, traders must note that the holiday effect is not a guaranteed phenomenon. Indeed, it has been observed in the historical data, but its market behaviour can vary from year to year. Thus, traders must effectively plan around share market holidays and adjust their positions accordingly.
How to plan around stock market holidays in 2024?
Let us have a look at some popular actions that you can consider while preparing for market closures:
1. Review holiday calendars
- Stay informed about upcoming stock market holidays
- Regularly check holiday calendars provided by stock exchanges or financial news outlets
2. Adjust trading schedule
- Plan your trading activities around market holidays
- Avoid scheduling trades on days when the market is closed
- Consider adjusting your trading schedule to accommodate:
- Shortened trading weeks
or
- Extended holiday weekends
3. Manage positions ahead of holidays
- Take proactive steps to manage your investment positions before the stock market holidays
- Evaluate your portfolio holdings
- Consider making any necessary adjustments
- Try to rebalance your portfolio ahead of time
4. Set stop-loss orders
- Implement stop-loss orders or other risk management strategies
- This will help you protect your investment positions in case of unexpected market movements before or after holiday periods
- Setting predefined exit points also limits potential losses
Does volatility increase around holiday periods?
Yes, during holiday periods, increased volatility and reduced liquidity are commonly observed. Both these situations are adverse and can have significant implications for investors and traders. Let us understand this in detail:
Reduced liquidity
|
Increased volatility
|
- During stock market holidays, trading volumes in the Indian stock market usually decrease.
- This reduction happens as market participants take time off for celebrations and vacations.
- Reduced liquidity means there are fewer buyers and sellers in the market.
- A decrease in liquidity leads to:
- Wider bid-ask spreads
and
- Depleted trading activity
- As a result, executing trades at desired prices becomes more challenging.
- Often, investors experience delays in order fulfilment.
|
- During stock market holidays, the market becomes more susceptible to:
- Sudden price movements
and
- Volatility
- Consequently, even small trades disproportionately impact stock prices and exaggerate price swings.
- Heightened volatility also creates opportunities for quick gains but also poses risks for investors.
|
Conclusion
Stock market holidays represent the period of suspension during which trading of financial securities is not allowed. In 2024, the NSE and BSE have listed 21 holidays (out of which five fall on Saturday/Sunday). Traders must remain cautious around the holidays as this period is often marked with increased volatility and reduced trading volumes. By regularly tracking the list of share market holidays and appropriately adjusting positions, traders can better prepare for market closures and enhance their portfolio returns.
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