The table that compares cumulative wealth over this period makes the contrast impossible to miss. While this is a theoretical exercise assuming no transaction costs of being invested only overnight or intraday, it serves to highlight the cumulative impact of overnight versus intraday market movements.
To be sure, this is not an Indian anomaly. Researchers studying US and European markets have found similar evidence of what they call the “overnight return premium”.
2. Retail investors tend to trade at the opening bell, reacting to headlines or emotions, while institutional investors transact closer to the close, creating a pattern of reversals across sessions.
3. Another explanation, often referred to as “news window effect”, suggests that markets process information more thoroughly when they are closed. Overnight, investors have time to digest global developments, company announcements, and data releases, allowing prices to reset more calmly by morning.
No single reason explains everything, and that is the point. The markets are complex systems, and patterns like this one reveal more about how risk and information flow through them than about how to exploit them. The persistence of this anomaly across countries and decades suggests that it may be a structural feature of modern markets rather than a statistical curiosity.
This doesn’t mean investors should attempt overnight trading strategies. Transaction costs and taxes would wipe out any advantage. The real insight is that the advantage lies in periods where nothing seems to be happening. The noise of intraday trading feels exciting, but it adds little to long-term wealth creation. The compounding that matters takes place when we stay invested, not when we act.
There’s a psychological dimension too. Investors often confuse movement with progress. The data suggests that patience can be more powerful than action. The discipline to hold through uncertainty, to let time do its quiet work, delivers what constant reaction cannot.
When we review our portfolios each morning, the changes we see reflect a market that never sleeps. The market’s night shift runs unseen and relentless, building value for those patient enough to let it work.
