Festivals' Effect on India's Tourism and Hospitality Sector Stock Returns

Purpose: This study investigates whether Hindu cultural and religious festivals create systematic return patterns in the tourism and hospitality sector, thereby challenging the Efficient Market Hypothesis. Design/Methodology/Approach: The study analyzes select Bombay Stock Exchange-listed tourism and hospitality companies using data from January 1, 2013, to December 31, 2022. A non-parametric Mann–Whitney U-test is employed to compare pre- and post-festival stock returns across events such as Diwali, Akshaya Tritiya, Dhanteras, and Muhurat trading. Findings: Post-Diwali returns are generally higher than pre-Diwali returns for most firms, but differences are statistically insignificant except for one company. Mixed results are observed for Akshaya Tritiya, with mostly negative post-event returns and limited statistical significance. No significant impact is found for Dhanteras. In contrast, Muhurat trading shows a strong and statistically significant effect, with consistently high and positive returns, a higher probability of gains (60%–100%), and lower volatility for most stocks, indicating returns are not driven by higher risk. Implications/Originality/Value: The study provides evidence of a Muhurat trading anomaly in the Indian stock market while rejecting consistent festival effects for other events. It contributes to behavioral finance literature by highlighting culturally driven inefficiencies in a sector-sensitive context.