A slowing domestic economy, weak earnings, record low rupee, looming China-US tariff war and foreign outflows are among many reasons why the stock market is falling for the last couple of days. But if history is to go by, another factor is now weighing on the market: Kumbh Mela!
History suggests the stock market has fallen in past six Kumbh Melas, with the average fall for Sensex standing at 3.42 per cent. To be sure, the average length of Kumbha festival is 52 days and Sensex has delivered negative returns in all of the past six instances, SAMCO Securities said in a note.
However, the returns six months post the Kumbh Mela have been positive in five out of six instances, with the average gains standing at 8 per cent.
SAMCO Securities believes the Kumbh Mela (and so market selloff) brings a ray of hope for the market bulls to wash away the karmas accumulated in a bull market. It said there is usually a high chance of stock investors committing mistakes when the market is rising rapidly and participants just want to flip stocks in lure of quick profits.
“Unfortunately, market participants do not realise their mistakes till there is a correction or a crash,” it said.
Like Kumbha Mela, SAMCO Securities said this ongoing correction in the market is like a reset to start afresh just like a dip in the holy waters.
The Kumbha Mela is celebrated every 12 years and is all about devotees gathering to bathe in sacred rivers. Kumbha Mela occurs when Jupiter enters specific zodiac signs and aligns with the Sun and Moon in particular configurations, marking a period of heightened spiritual significance. Hindus believe this alignment imbues the rivers where Kumbh is celebrated with cosmic energy, making it an auspicious time for purification and renewal.
The belief is that the sacred waters will cleanse them of their sins and aid in attaining moksha (liberation). Will the ongoing stock market correction take all market froth away?
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