Sensex dips 4% during Kumbh Mela. History indicates 8% rally in next 6 months
Mar 6, 2025, 21:42 IST
After a not so holy dip that the BSE Sensex took during the Maha Kumbh period when it fell nearly 4%, is it time for its resurrection? The history of market performance during Kumbh since 2004 indicates that five out of six times, the index has ended positive over the next six months, with average returns of 8%.
Historically, the BSE Sensex has exhibited a pattern of dipping during the Kumbh Mela, followed by a notable rebound in the subsequent six months. In the current Maha Kumbh period, the Sensex has declined by approximately 4%. However, past data since 2004 indicates that in five out of six instances, the index delivered positive six-month returns post-Kumbh, averaging an 8% gain.
Historical Performance During Kumbh Mela:
2004 Ujjain Kumbh (April 5 to May 4): The Sensex fell by 3.27% during the event and posted a modest 1.01% gain over the next six months.
2007 Allahabad Kumbh (January 3 to February 15): The index dipped 2.92% during the Mela but rebounded with a 12.26% increase in the following six months.
2010 Haridwar Kumbh (January 14 to April 28): The Sensex experienced a slight decline of 1.68% during the event but surged 13.22% in the subsequent six months.
2013 Allahabad Kumbh (January 14 to March 10): The index dropped 3.02% during the Mela but recovered with a 9.08% gain over the next six months.
2015 Nashik Kumbh (July 14 to September 25): The Sensex saw a significant decline of 8.29% during the event but managed a 6.34% increase in the following six months.
2021 Haridwar Kumbh (April 1 to April 30): The index fell 1.45% during the Mela but experienced a robust 15.75% rally over the next six months.
This recurring trend suggests that while the Sensex often faces short-term declines during the Kumbh Mela, it tends to recover and achieve positive returns in the ensuing half-year period. Investors might consider this historical pattern when making investment decisions during such events.
However, it's essential to note that past performance does not guarantee future results. Investors should consider current market conditions, economic indicators, and individual financial goals before making investment decisions.