Are you ready for some divine dip? Sensex has recorded negative returns during every Kumbh Mela in the last two decades.
Since stock markets often have a unique tendency to follow seasonal patterns, one such seasonality analysis showed that Sensex has never posted positive returns during the Kumbh Mela festival held in the last two decades.
An analysis by SAMCO Securities shows that the average loss for Sensex during the last six Kumbha Melas held since 2004 was 3.42 per cent, with negative returns during all festivals.
The highest fall during the Kumbh Mela festival was from July 14 to September 28, 2015, when Sensex fell by 8.29%. In the previous Kumbh Mela held from April 1 to April 19, 2021, Sensex closed 4.16% lower in the 18-day cycle.
From April 5 to May 4, 2004, Sensex fell 3.29% in 29 days.
In traditional Hindu beliefs, it is said that a dip in the Kumbh Mela at the Triveni Sangam, the confluence of the Ganga, Yamuna and the mythical Saraswati rivers, can help wash away sins and attain ‘moksha’ (liberation).” For bulls too, the Kumbha Mela is celebrated in bull markets. It brings a glimmer of hope to wash away accumulated karma and unfortunately there is a high chance that participants will make mistakes and just flip the stock. “Participants don’t realize their mistakes until there is an adjustment or breakdown, which acts like a reset, like falling into holy water.” said.Also read | RIL stock valuation hits Corona-era low. Six signals indicate a turnaround.
During its transit, Jupiter’s gravitational influence is said to affect Earth’s tides and even have subtle effects on human behavior and social patterns.
So why does the stock market also fall during Kumbh Mela?
“There may be several reasons for this peculiar market behavior during and after Kumbha. The cultural focus and economic changes of the Kumbha Mela, during which millions of Indians make a pilgrimage, may temporarily change consumption patterns and reduce economic activity in certain sectors. These events are also deeply rooted in renewals and decoupling, which can unconsciously influence investor behavior, resulting in greater risk-aversion sentiment,” SAMCO said.
Jupiter’s 12-year cycle and alignment with the Kumbh Mela are a reminder that markets, like human behavior, are often influenced by factors that go beyond rational economics.
Investors may learn from this correlation, viewing the historical underperformance as a signal to adopt a more cautious strategy during Kumbh Mela, the brokerage said.
