Do Krishna Paksha (new moon phase) and Shukla Paksha (full moon phase) affect the Indian stock market? – A study of lunar cycles in the Bombay Stock Exchange

Abstract

Indian culture has popularly believed that the moon has a close relation with human thinking and decision making. The impact of the moon on human behaviour has been an important aspect of research study. As stock market activity and movements are based on human behaviour and decision making, it is desirable to study its impact on stock market activity and movements. Indian culture describes lunar cycles as Shukla Paksha (the bright lunar cycle) and Krishna Paksha (the dark lunar cycle). This article studies the impact of lunar cycles on the Bombay Stock Exchange (BSE). The study uses the BSE Sensex data over a period of 17 years to study whether there are significant differences in the stock market activity and movements in the Shukla Paksha and Krishna Paksha. Based on the analysis, the article finds that the impact of lunar cycles on Indian stock markets is quite limited. After an introduction to lunar cycles, the article provides a literature review on the current research on lunar cycles and their impact on stock markets. The article then studies the impact of lunar cycles in relation to the BSE Sensex. The article provides inferences based on study and the implications of the study.