Is it permissible to invest in the stock market ?

Answered according to Hanafi Fiqh by ShariahBoard.org

Assalamualaikum

I have heard from numerous scholars that investing in the stock market is permissible yet my parents are adamant that it is not. Also if it is permissible would day trading within the stock market be permissible?

الجواب وباللہ التوفیق

Investment in the stock market is permissible. But there are some conditions for it:

  1. The company one is to buy stocks of its original business must be Halal.
  2. Some assets (fixed assets) of this company should have come into existence. It should not be in the form of cash only.
  3. If the company deals in interest then one should raise objection against it.
  4. At the time of the distribution of the profit one must give the portion of profit derived from interest-based deposit in Sadaqah without the intention of getting reward for it.
  5. The purpose of buying and selling of the shares should not only be balancing the mutual difference in which there is no possession rather its purpose is to become partner in that company and get its annual profit.

(فتاویٰ عثمانی :۳ / ۱۷۷،۱۹۲ وفتاوٰی دار العلوم)

واللہ اعلم بالصواب

 

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