Lack of monsoon rain may not mean stocks pain

Jul 18, 2012 |

Reuters

mumbai

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Indian stock markets have been awash with worries about a weak monsoon, but a look at the historic performance of the Sensex in the June-September season may dispel those fears.

Stock investors tend to track the monsoon season, given lower-than-expected rainfalls can raise inflation worries and hit rural consumption.

However, a look at how Sensex has performed over the monsoon season shows little actual impact from rainfalls.

In 2009, a year when India suffered a drought, the BSE index went on to gain 17.1 percent during the June-September period.

In fact, the Sensex has only fallen twice during periods of short monsoon rainfall in the past 10 years: when the global financial crisis was percolating in 2008 and during the midst of global bear markets in 2002.

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