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How the stock market performed on Republic Day

How the stock market performed on Republic Day
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Introduction

Republic Day, celebrated on January 26th, marks the adoption of India’s Constitution in 1950. It’s a day of pride, filled with grand parades on Kartavyapath, showcasing the nation’s journey and achievements. While many are glued to their TVs to watch this celebration, others focus on a different kind of screen—the stock market.

Even though Republic Day is a stock market holiday, its influence on trends can’t be ignored. Market movements before and after the holiday might reveal short-term changes. Understanding these shifts can help investors make informed decisions and manage their portfolios better. 

Let’s explore these stock market Republic Day trends and how these trends lead to changes in trending sector stocks.

Changing Trend in NIFTY50

YearPrice Level One Week Before (Rs.)Price Level One Week After (Rs.)% Change
201810,741.5510,666.55-0.70%
201910,886.8010,934.350.44%
202012,343.3012,089.15-2.06%
202114,433.7014,924.253.40%
202218,308.1017,516.30-4.32%
202317,894.8517,854.05-0.23%
202422,097.4521,771.70-1.47%
Source: NSE

*One week before Republic Day entails the data as of 15th January with a one-day shift in case the 15th was a market holiday. Similarly, one week after the 26th shows the data as of 5th of February.

The NIFTY trend around Republic Day shows no consistent pattern, with movements influenced more by broader market dynamics than the event itself. In 2018, 2020, 2022, and 2024, the index experienced declines of 0.70%, 2.06%, 4.32%, and 1.47%, reflecting bearish sentiment during those years. 

On the other hand, 2019 and 2021 saw gains of 0.44% and 3.40%, respectively, indicating some bullish momentum. Meanwhile, 2023 saw a minor 0.23% decline, suggesting market stability. More significant drops, such as in 2020 and 2022, were likely due to external factors rather than Republic Day. 

Overall, the period does not show a predictable trend, emphasizing the need for investors to focus on broader economic and global cues instead of relying solely on this occasion for market predictions.

Changing Trend in BSE SENSEX

YearPrice Level One Week Before (Rs.)Price Level One Week After (Rs.)% Change
201834,843.5134,757.16-0.25%
201936,318.3336,616.810.82%
202041,872.7341,142.66-1.74%
202149,034.6750,731.633.46%
202261,308.9158,644.82-4.35%
202360,092.9760,841.881.25%
202473,327.9471,731.42-2.18%
Source: BSE

*One week before Republic Day entails the data as of 15th January with a one-day shift in case the 15th was a market holiday. Similarly, one week after the 26th shows the data as of 5th of February.

From 2018 to 2024, the SENSEX exhibited a varied pattern during the Republic Day period. There have been both positive and negative movements over the years. In 2019 and 2021, the index saw moderate increases of 0.82% and 3.46%, respectively, indicating some bullish trends. 

However, there were also notable declines, with the SENSEX dropping by 1.74% in 2020, 4.35% in 2022, and 2.18% in 2024, reflecting bearish phases. The year 2023 was a slight exception, with a 1.25% gain.

Overall, the SENSEX trend during Republic Day doesn’t follow a clear or consistent pattern. While some years showed positive movement, the declines in other years overshadowed them. This suggests that external factors like market conditions and investor sentiment play a much more significant role than the event itself. 

Overall Trends Of Share Market Republic Day

There isn’t a consistent trend around Republic Day in the stock market, with price movements varying yearly. The market does not display a clear pattern, whether gain or loss. However, on a broader scale, stock market holidays 2025, like Republic Day, do have an impact, influencing trading volumes, prices, and sentiment.

    Impact on Trading Volume

    Before the holiday, trading volume often surges as investors rush to complete transactions, either rebalancing their portfolios or making last-minute adjustments. This is followed by a drastic drop to zero on the holiday itself. When the market reopens, pent-up demand from the closure results in higher trading volumes as investors react to news and events during the break.

      Effect on Stock Prices

      Following the holiday, stock prices can experience volatility driven by speculative trading and risk management. When the market reopens, these stocks often see sharp price movements as investors adjust to new information and react to changes in sentiment during the closure.

        Influence on Market Sentiment

        Before the holidays, many investors adopt a cautious approach, reducing their activity to avoid exposure to unexpected market events. Speculative traders, however, may heighten activity by leveraging short-term price fluctuations, which can create increased volatility and shifts in market sentiment.

          Global Market Influence

          Global events during the stock market holidays can influence the Indian market once it reopens. Investors with international exposure may need to adjust their strategies based on developments abroad. Indian companies’ ADRs and GDRs traded internationally can offer early indications of market sentiment.

            Liquidity Management

            Lower trading volumes around holidays reduce liquidity, making it harder to execute large orders without impacting stock prices. Investors often adjust their cash positions to ensure they can manage liquidity once the market reopens, leading to more volatile price movements for larger trades.

            How To Invest During The Holiday Volatility?

            • Rebalance your portfolio to reduce exposure to volatile sectors and diversify your investments. Keep cash reserves for opportunities post-holiday and avoid overleveraging. If needed, consult a stock market advisor for perfectly aligned strategies.
            • Set stop-loss, trailing stop, and limit orders to manage potential losses and protect gains during market volatility. A stock screener can help you filter stocks that meet your criteria.
            • Use hedging strategies like put options, futures contracts, or inverse ETFs to protect against market declines.
            • Stay informed on global developments and upcoming announcements that may impact the market when it reopens.
            • Focus on high-confidence trades and exercise patience, avoiding impulsive decisions driven by market noise.
            • Use technical analysis to identify key support and resistance levels and track chart patterns for better investment decisions.

            While the stock market does not show consistent trends around Republic Day, the impact of holiday volatility cannot be ignored. Both domestic and global factors often affect trading volumes, stock prices, and sentiment. 

            As an investor, you should focus on diversifying your portfolios, using protective orders, and staying informed to manage risks. Strategies like hedging, patience, and consulting a stock market advisor can help mitigate potential losses and capitalize on opportunities during market uncertainty.

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            FAQs

            1. Is Republic Day a stock market holiday?

              Yes, the stock market does not operate on 26th January every year.

            2. Apart from the effects of the stock market Republic Day and other similar market holidays, what other external factors can affect stock prices?

              External factors, such as economic indicators, monetary policy, political events, corporate earnings, global market movements, natural disasters, oil prices, investor sentiment, supply chain disruptions, technological changes, global crises, and market liquidity, can significantly affect stock prices.

            3. What is the current price level of Nifty50 and BSE Sensex?

              As of 10th January 2025, the price level of the SENSEX is Rs.77,378.91, and that of the NIFTY50 is Rs.23,431.50.

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            I’m Archana R. Chettiar, an experienced content creator with
            an affinity for writing on personal finance and other financial content. I
            love to write on equity investing, retirement, managing money, and more.

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