What rules the market's mind in weeks of truncated trading

U.S. president Donald Trump abruptly suspended reciprocal levies on most countries last week, igniting a jubilant rally across world markets. But not in India, where the local markets stayed closed on 10 April for a public holiday. Social media lit up with memes calling to open the market, which had seen deep losses over the previous six days.

- Niti Kiran & Mayur Bhalerao

And to top it, the current week has just three trading days, only the 22nd such instance since 2011.

What do truncated trading weeks mean for market behaviour? A Mint analysis of data since 2011 showed that the Sensex gained in 60% of the 22 heavily truncated weeks (those with only three trading days). However, in most such cases, it lost these gains the following week. Overall, the benchmark index outperformed both the preceding and subsequent trading weeks in 52% of these cases, suggesting that short weeks don't necessarily equate to particularly weaker or stronger returns.

Ranju Rajan, head of managed accounts at Axis Securities, noted that the shortened trading week following last week's tariff reprieve opened with improved sentiment. "Normally, such scenarios are noted for 'sharp buying' (or selling), especially if there is a major impact at the global or domestic level (e.g. policy change, elections or any such events)," he said.