Seasonality in Indian stock markets
Previously, I shared this table of monthly performance for the S&P CNX Nifty-50 market index:
(click for bigger image)
This year, the Nifty was almost flat in March and up 7% in April. Neither 2006 nor 2007 have followed the historical pattern of weakness. Also, observe that May has the widest range of outcomes (-16% to +16%) - let’s see how this year turns out.
On a related note, see this DNA Money article (found via Value-Stock-Plus): Sell in May, return in Oct works, but …
. . . data processed from 1992 by Citibank reveals that India has returned an average 7.7% from the end of May to the end of September.
Historically, according to the Citigroup report, the worst four months for India have been from the end of February to the end of June, when it has given negative returns of 2.8%.
One important consideration is how rapidly the Indian capital markets have changed & matured over the past decade. This may make such historical analyses less effective since the factors that led to weaker performance in March/April may no longer matter. And then there’s the Law of Ever Changing Cycles!
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