It's June and stock Market Trader seeks answer to Monsoon impact on Indian Stock exchange? Wish the rainfall be advisable stagger? Wish the rain arrive on prison term and every last such questions that disturb the Traders mind. The rain and the monsoon are well-advised to be the biggest cause for the economy and the markets.

India is considered to embody agrarian saving with the livelihood of 70% of the population is myrmecophilous along the demesne they cultivate. The agriculture sector contributes about 18% of the GDP and 58% of employment. The mediate outcome on the economy is quite higher.

How Stock Market have chemical reaction to the Monsoon?

We can make out the Impact of Monsoon on Indian stock grocery away seen the monsoon information since the year 2000 to get chastise see of it. Looking for at the information information technology was observed that monsoon was just 10% below the long term average.

The Two of the biggest falls were observed in the year 2009 with Shortage of the rains twilight by 21.8 percent, followed by the year 2002 when monsoon fell short by 19.2 percent. In the class 2004, 2012 and 2014 the rain was short by around 13 pct.

In Order to check the Impact on the market, we divided the year in two parts. The first group is 'tween April and September and the second group falls between October and March. The logic behind doing is that because past April early predictions start coming in happening monsoon expectation and budget encroachment fizzles out in a month. Likewise aside Oct monsoon impact is clearly and the corporate and diligence numbers racket start exhibit the impact the poor monsoon had along the saving.

SENSEX RETURNS DURING Hardscrabble MONSOON YEARS

Year April to September October to March
2002 6.81 61.87
2004 8.95 30.64
2009 1.35 15.86
2012 -0.16 9.15
2014 1.02 -5.99

The biggest cushion in the information is in the yr 2009, which byword the biggest drop in monsoon only the markets blast up by 76.41 percent in the first half. Last half was flattish as food grain production touche 218.11 million tonnes as comparison to 234.47 million tonnes in 2008.

Reasons for lesser Monsoon Impact happening Indian Stock Market

  • The falling contribution of agriculture to GDP. Share of the sector to GDP has fallen from 25 percent to 18 percent.
  • The dependence on rains for agriculture is reflect in the lesser come by food grain production. The Better irrigation, unfirm to crops requiring less water, espousal of technology and contributed in shorten the impingement of monsoon.

Lastly to conclude the Monsoon impact on Native American Stock Market is that  monsoon might not be as painful as the general market observation is, especially during the commencement incomplete of the financial. But, one needs to be troubled in the second half of the year when actual data starts impacting the market.