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K.S. Badri Narayanan
Namrata Gada

Brokers book profits on part of portfolio, avoid undue risks

Chennai/Mumbai , Oct 18

Every market player would like to make an auspicious beginning and what better day than trading on Moorat day - the first day of the new year of the Hindu calendar.

The notion that if fortune smiles on you on the first day of the year she would bestow similar grace right through the year has a powerful appeal in investors' minds.

With such a sentiment influencing traders, is trading on that day only of symbolic value or are traders able to make money?

"There is a perception that dealers book profits on a chunk of shares in their existing portfolio on Moorat trading day and expect to do so in the whole year," said Mr Vijay Kedia, Managing Director, Kedia Securities.

"Also, brokers ask clients to execute transactions through them. Dealers also do not undertake undue risks. Trading is generally done in A-group and liquid stocks."

A quick check on stock market behaviour on Moorat day reveals that on seven out of 10 occasions since 1996, the market ended in positive territory. But most of the time, the markets have moved in a narrow range.

Only last year, the gap between the high and low values of the Sensex was above 100 points. Otherwise, it has hovered between 15 and 75 points, indicating that only symbolic trading takes place on Moorat day.

"In our office, we generally buy shares as token, as it is considered to be an auspicious day. But we also book profits in topline counters. Though volumes are very low on Moorat day, markets open on a high and rise by 50-60 points," said Mr Bhavesh Vakharia, Head (Retail Dealing), Parag Parikh Financial Advisory Services Ltd.

"There is fresh fund buying on Moorat day, along with profit booking. This year, we will buy shares of companies depending on the second quarter results tomorrow. We are also looking at purchasing shares of pharma companies as they are very attractive," said Mr Shailesh Shah of Rapid Capital Services.

Significance of Moorat trading

Diwali has a special significance for the traders, especially stockbrokers. It is when the new business year begins and Goddess Lakshmi, who represents good fortune and wealth, is worshipped.

On this day, Chopada puja is done by the business community. Brokers perform the puja to invoke Goddess Lakshmi for progress and prosperity and perform Moorat trading to mark the beginning of the New Year.

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