Historically, in a pre-election year, equity returns in December have been higher.
Nikhil Kamath, director of Zerodha, believes that bulk of FIIs have vested interests in driving bourses higher in December to shore up P&L statements ahead of their bonuses and year-end reviews.
The last month of the calendar year is likely to be action-packed for equity markets with multiple key events lined up that may result in investors reacting aggressively on either side.
December has been good for equity markets with Sensex gaining on an average 4.46% and the markets ending in green on nine out of 10 occasions.
In fact, going by the average returns in last one decade, December has been the second best month after September, which has delivered an average 5.72% returns.
What’s more, the returns in December in a pre-election year have been even higher with Sensex rising 15.74% in December 2003 and by 6.10% in December 2008.
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