Moneycontrol Be a Pro
Get App
Last Updated : Sep 06, 2017 10:38 AM IST | Source: Moneycontrol.com

Sensex history suggests September belongs to bulls; will 2017 be different?

The index gave negative returns of nearly 10 percent in four out of ten years. The index slipped 9.8 percent in the year 2008, followed by 1.9 percent fall in 2011, near 1 percent drop in 2014, and 1.8 percent decline in the year 2016.


The month of September started flat for D-Street but anecdotal evidence suggests that in six out of last 10 years bulls managed to take control of D-Street.

The S&P BSE Sensex slipped over 2 percent in the month of August while the Nifty50 ended with losses of 1.6 percent as geopolitical concerns along with persistent selling by foreign investors weighed heavily on equity markets.

The Nifty50 which managed to claw back over its crucial resistance level of 9900 will try and make a dash towards Mount 10K in this month. The index gained the most in the year 2007 when the index rose a little over 12 percent.

Close

For the month of September, the Nifty50 rose 10 percent in the year 2010, followed by 9.9 percent rally in the year 2009, and 8.56 percent gain in 2012.

The index gave negative returns of nearly 10 percent in four out of ten years. The index slipped 9.8 percent in the year 2008, followed by 1.9 percent fall in 2011, near 1 percent drop in 2014, and 1.8 percent decline in the year 2016.

“At the current level Indian equity market is fairly priced and further upticks will depend upon earning revival,” Sumeet Bagadia, Associate Director, Choice Broking told Moneycontrol.

“Given the strong economic fundamental of the country sharp correction seems unlikely. We anticipate the markets to remain flattish to slightly positive during the month of September,” he said.

index

The index is up 21 percent so far in the year 2017. The 1QFY18 earnings season marked another quarter of weak performance and a subdued start to FY18.

The performance was also hit by GST-related destocking in several consumer-oriented sectors – Auto, FMCG, Healthcare and Consumer Durables, said a Motilal Oswal report.

The foreign portfolio investors (FPIs) turned aggressive sellers in August, post rising geopolitical concerns. They sold stocks worth USD2 billion after three consecutive months of inflows.

“FII’s have always been sensitive to global cues and we don’t see this changing in the near future given the prevailing tensions between the US and North Korea,” said Bagadia. FPIs will remain negative in all emerging economies until there is an amicable resolution between these two countries, he said.

The domestic institutional investors (DIIs) on the other hand bought stocks worth USD 2.5 billion in the month of August.

Historic data suggests that FPIs have remained net buyers of India equities for the month of September in seven out of last 10 years. They poured in over Rs 29000 crore in Indian markets in the year 2010.

While domestic investors remained buyers in 5 out of last 10 years but the quantum of selling is fiercer. DII sold shared worth Rs 7000 crore in the year 2010.

But, the year 2017 has come with its own set of challenge. FPIs remained net sellers in the previous month and amid geopolitical concerns, the trend is unlikely to reverse, suggest experts.

“Domestic saving is moving towards the financial assets through a Mutual fund which is why we seeing huge buying by DIIs. The FIIs stayed silent since the beginning of 2017, valuation may make FII’s cautious,” Dyaneshwar Padwal – AVP – Technical Analysis, KIFS Trade Capital told Moneycontrol.

“Looking at the high time frame chart market is strong so every correction is a buying opportunity. If we have a glance at the DII data, it is very much supportive to the trend. Fed rate cut and geopolitical worries could bring safe haven assets on limelight,” he said.

The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .
First Published on Sep 6, 2017 09:20 am
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant