What if most stock market gains happened overnight? New research from Capitalmind Mutual Fund found that over the past 25 years in India, the Nifty 50’s biggest returns occurred while markets were closed. What’s the story real or fake? Let’s break it down step-by-step.

Who is Capitalmind?

Capitalmind is a Bengaluru-based investment research and wealth management firm founded by Deepak Shenoy. It offers data-driven market insights, model portfolios, and rule-based investment strategies through its PMS and mutual fund platforms. Capitalmind blends research, education, and technology to ease long-term investing for Indian investors.

Do markets move when we sleep?

Good question. Capitalmind studied Nifty 50 data from 2000 to 2025 and compared two simple strategies:

  1. Buy at the close, sell at the next day’s open, meaning you hold the Nifty overnight.
  2. Buy at the open, sell at the close, a typical intraday approach.

Now here’s the shocker: if you followed the overnight strategy, your money would have grown nearly 100 times in 25 years. But if you followed the intraday strategy, you’d have lost more than 80% of your capital. Let that sink in. While most people were glued to their screens during market hours, the real wealth creation was happening when the market was closed.

What does the data actually say?

Capitalmind’s analysis paints a very clear picture:

  • Overnight gains: From 2000 to 2025, the Nifty’s “close-to-open” moves contributed nearly 40,000 points to its overall rise.
  • Intraday losses: During the same period, “open-to-close” movements subtracted around 15,000 points from its total growth.

To put it simply, if Nifty started at 1,600 points in 2000 and stands around 25,000 in 2025, almost the entire climb came from what happened after hours, not during live trading. That’s why Capitalmind summed it up perfectly: The overnight market created wealth, while the intraday market destroyed it.

How is that even possible? What drives overnight moves?

Several factors come into play:

  1. Global market impact: When the Indian market closes, the U.S. and European markets are still trading. Overnight, global sentiment, whether good or bad, affects how the Nifty opens the next morning.
  2. Corporate announcements: Most companies release quarterly results, announce mergers, or update policies after market hours. By the time the market opens, prices gap up or down to adjust to the new information.
  3. Institutional activity: Big global funds and FIIs often take positions overnight based on international trends, creating momentum before Indian retail investors even log in.
  4. Investor psychology: During the day, short-term traders react emotionally buying high, selling low. Overnight, emotions pause, and fundamentals reassert themselves.

So, while retail traders are fighting volatility intraday, the market’s real growth engine quietly works overnight.

Should I start trading overnight to get rich?

Absolutely not. And Capitalmind is very clear about this, too. This study is meant to explain a market characteristic, not to promote a specific trading strategy.

Here’s why:

  • Not a Capitalmind strategy: While Capitalmind runs mutual fund products, including the Capitalmind Flexi Cap Fund, this “close-to-open” concept is not how their funds operate.
  • Mutual funds invest long-term: Their fund uses a rules-based, quantitative approach, picking stocks based on momentum, quality, and valuation, not day-to-day trades.
  • Hard to replicate: For individuals, copying this pattern is nearly impossible due to transaction costs, taxes, slippage, and overnight exposure risks.

So no, this isn’t a “get-rich-while-you-sleep” hack. It’s a fascinating insight into how markets behave.

What does this mean for regular investors like us?

It means two big things:

  1. Time beats timing: You don’t need to watch the market every minute. Long-term investors who stay invested benefit from all the movements intraday and overnight without trying to predict them.
  2. Patience pays more than panic: If most of the gains happen overnight, then missing even a few key days or being out of the market during global rallies can severely hurt returns.

What to Learn from Capitalmind Data?

Capitalmind’s research challenges one of the biggest trading myths: that more screen time equals more profit. The truth? The data says otherwise. Intraday traders fought noise and lost ground. Overnight investors, unknowingly, rode global momentum and captured wealth. This insight reinforces what experienced investors already know wealth isn’t built by chasing candles; it’s built by staying invested through cycles. So, next time you’re tempted to trade every market move, remember: Sometimes, the best strategy is to let the market work while you rest.

Conclusion

Capitalmind’s study doesn’t just highlight a quirky statistic; it reveals a fundamental truth about market behavior and investor psychology. It proves that the real power of compounding works with patience, not prediction. Since at the end of the day, markets may move during trading hours, but the real money seems to be made overnight.