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An analysis conducted for the month of October has shed light on the remarkable seasonality of the Nifty, with findings indicating that it has consistently demonstrated robust performance during this period. The report, compiled by JM Financial Institutional Securities, reveals that over the past decade, the Nifty has closed in the green in nine out of ten instances, boasting an average positive return of 2.9 percent. This makes October the month with the highest average return observed in any calendar month.
The Nifty Mid-cap index has also exhibited impressive seasonality, having closed in the green on all ten occasions, with an average return of 3.3 percent. However, it managed to outperform the Nifty only five times, with an average outperformance of 0.4 percent.
Further analysis of indices revealed intriguing trends. The Bank Nifty and Financials index, for instance, both demonstrated remarkable consistency by closing in the green on all ten occasions. The Bank Nifty boasted an impressive average return of 6.2 percent, while the Financials index secured an average return of 5.4 percent.
Other indices that experienced notable seasonality include the Metal, Auto, and Energy indices, which all closed in the green on eight occasions each. Their average returns were 4.1 percent, 3.9 percent, and 3.5 percent, respectively.
On the flip side, the FMCG index recorded seasonality in the negative, closing in the red on seven occasions with an average negative return of 0.4 percent.
The report also analyzed instances where indices outperformed or underperformed the Nifty. The Bank and Financial indices emerged as the frontrunners, outperforming with an average of 3.3 percent and 2.5 percent, respectively. In contrast, the FMCG and Technology indices underperformed the most, with an average underperformance of 3.4 percent and 2 percent, respectively.
Delving into individual stocks, the report highlighted those that exhibited strong seasonality. Stocks that closed in the green on nine or more occasions, boasting an average positive return of over 5 percent, included ICICI Bank, SAIL, Manappuram Finance, NMDC, State Bank of India, GMR Airports Infrastructure, Power Finance Corporation, Tata Steel, Ashok Leyland, Petronet LNG, and JK Cement.
Conversely, stocks that closed in the red on seven or more occasions, with an average negative return of more than 1 percent, were Oracle Financial Services Software and Max Financial Services.
Overall, the report offers valuable insights into the seasonality of key indices and individual stocks in the Indian market during the month of October, providing investors with valuable data to consider in their investment strategies.
