Ramadan and financial markets: global perspective on religious calendar effects

Purpose This study aims to examine whether the start of Ramadan is associated with abnormal stock market returns across global financial markets and whether these effects vary over time and across different financial conditions. Design/methodology/approach Using daily stock index data from 78 countries for 2006–2025, the study uses an event-study methodology centered on the first trading day of Ramadan. To isolate the direct impact of localized cultural practices, the study attempts to contrast the global aggregate analysis with a dedicated sub-sample of 20 Muslim-majority countries. Abnormal returns (ARs) are calculated using a constant mean return model, and cumulative average abnormal returns (CAARs) are evaluated across multiple event windows. A statistical inference is conducted using the Wilcoxon signed-rank test. Findings The results show that Ramadan-related ARs are time-varying rather than persistent. While the magnitude and statistical significance of these returns are substantially amplified in Muslim-majority markets, the direction of the effect remains fundamentally state-dependent across all sub-samples. Significant ARs are often observed in pre-event windows, suggesting that investors anticipate events. The magnitude and direction of these effects vary across years and are amplified during periods of financial stress, such as the global financial crisis and the COVID-19 period. Research limitations/implications The analysis relies on aggregate market indices and does not examine firm-level heterogeneity or directly measure behavioral channels such as investor sentiment or liquidity changes. Practical implications The findings highlight the importance of incorporating cultural and religious calendar events into financial risk assessment and portfolio management, particularly during periods of heightened market uncertainty. Originality/value To the best of the authors’ knowledge, this study provides the first comprehensive global event-study analysis of Ramadan effects across 78 countries over two decades. It demonstrates that religious calendar effects are conditional, time-varying and shaped by broader financial environments.