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May Sees The Biggest Monthly Fall in 2012

Deepak Shenoy1 min read
Quick Facts
What is "May Sees The Biggest Monthly Fall in 2012" about?
What category is this article in?
General
Who wrote this article?
Deepak Shenoy, Capitalmind's research team.
When was this article published?
Published 31 May 2012.
How long does this article take to read?
1 min read

My standard month-end post of returns for the Nifty gives a –6.2% return, making it the third negative return in a row and the worst for 2012.

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What can we expect for June?

  • The average return for June is the third best of the year (after December and February) at 1.3%, but with a standard deviation of 7.5% it is known to be a volatile month – returns have ranged from –17% in 2008 to +13.5% in 1997.

  • We have Greek elections in June which might determine the course for world markets. An election that brings the right wingers to power might mean a lot of sabre rattling and thus, volatility.

  • Crude prices have softened, but expect inflation to remain high.

  • June 18 is the monetary policy review, mid-quarter. This is after the WPI inflation numbers come in, which means the RBI gets time to see how inflation has panned out before taking a decision to cut further or otherwise.

  • Liquidity looks like it’s not so much a concern but we may see a temporary lack of money as the June 15 deadline to file the first tax installment comes in.