Home » January & Sensex: What is the Saga?
Subscribe for News letter
 
 
Fetching Data...
Site Map Why Finalaya
Financial Blog

January & Sensex: What is the Saga?

12 Jan 2016 |By: Team Finalaya

January and Sensex Trend

The year 2016 has been a catastrophic story so far for the Indian Markets.  The wobbles in Chinese equity markets have impacted the global markets and Indian Markets have been no exception. The blue chip indices have seen a destruction of as much as 5% amidst the trading halt in China Markets after its indices hit circuit breakers of 7% twice in the last week.

Amidst the carnage in the broader markets, the mid-cap and small-cap baskets have resembled their outperformance of 2015 vis-à-vis the large caps. These junior caps have bucked the trend and have seen a meagre erosion of ~ 2%.

As January marches ahead in 2016, the Indian Markets continues to sink further and key benchmarks have already witnessed new 52 week lows and breached key psychological levels of 25000 and 7500 in the process. The first business 7 days of CY 2016 have already yielded a significant damage and any hopes of revival are looking gloomier with the worsening global jitters.

“As goes January, so goes the year” also known as “January Effect” is an age old adage. January 2016 so far has been a disastrous one and it needs to be seen how things unfold for the rest of the month and subsequently the year.

The following is an effort to analyse the historical trends of BSE Sensex, “First 7 Business Days Returns”, “January Month Returns” and their correlation with the respective Calendar Year Returns. The statistics from CY 2000 to CY 2015 have been used to evaluate whether “January Effect” is prevalent in Indian Capital Markets or not.

BSE Sensex: “First 7 Business Days Returns” & “CY Returns”

First 7 Business Day & CY Returns

CY 2011 was the worst year in the pack with -6.40% returns in the 7 business days. The highest return in the basket was 5.80% in the year 2000. All in all, 9 instances out of 17 have yielded positive returns in the initial 7 business days of the Calendar Year.

The linkage between the initial 7 business days and calendar year returns reveal that 9 times they have resembled each other. However, when we drill down further, 7 times Sensex have yielded positive returns in the initial 7 business days and the respective calendar year. In the negative territory, 2011 was the only year when Sensex dipped -6.40% in first 7 business days and -24.64% in the entire year. 

 BSE Sensex: “January Returns” & “CY Returns”

January Month Returns & CY Returns

On analyzing January Month returns, the worst year was 2008 with -13.00% returns in the first month itself and 52% for the entire year. On the flip side, 2012 was the best year with 11.25% gains but the entire year just managed to generate 25.7% returns. January Month has been positive on 8 occasions for Sensex and negative on another 8 instances.

When we compare January returns with calendar year returns for Sensex, 7 times they were in line with each other. Further analysis reveals that on 5 times, both January and Calendar ended in green however only two times they (2008 and 2011) they ended in losses together.

After the tragic 2015, it has not been an ideal start for 2016 and the first 7 days have witnessed losses to tune of 5% in BSE Sensex. The good part is historical facts reveal that there is not much correlation between January returns and the yearly returns in the negative zone. In the last 15 years, there have been just 2 occasions when January finished in red and so did the calendar year.

To turn things around, it will need a courageous effort from the Indian Stock Market to perform amidst the global worries. On domestic front, a lot will depend on Q3 Corporate Earnings, Budget 2016 and government policies in the first quarter, which will decide the outlook of rest of 2016.

Recent Blogs

20170606

PE Investment trend – what’s in it for retail investors?

20170529

NPA Ordinance – will it eradicate the NPA menace?

20170524

Are these the golden days for Mutual Funds?

20170522

Real Estate Regulatory Act (RERA) effect on Aam Aadmi

20170501

Is India creating enough jobs for aspirants?

20170424

Will GST rollout raise inflation?

20170414

Why Pharma stocks are going through a rough patch?

20170407

Markets at all-time high - is correction on cards?

20170323

Is Indian economy resilient enough to sustain Donald Trump onslaught?

20170320

Demonetization & long-term economic outlook

20170315

What’s in store for Indian equities in FY2018?

20170309

How Reliance Jio is changing telecom landscape?

20170308

Will IPOs reward investors in 2017?

20170302

Five Hidden Benefits Of Having Health Insurance

20170109

BYE BYE 2016, WELCOME 2017

20161201

Planning to start an SME? These tips can help your SME on its growth trajectory

20161005

Planning to buy an expensive home? Here are the things you should know

20160928

Lending institutions may become wary of large loans

20160923

The dark and bright side of ULIPs

20160921

Are banks on their way to come out of NPA mess?

20160916

US Presidential elections and the Indian economy

20160913

Ache din continues to elude the aam aadmi

20160908

Is gold losing its sheen – demand slowing down in India and China?

20160906

Who needs Professional Liability Insurance & Why?

20160905

What if oil climbs back to the $80 or $100 a barrel?

20160822

Top 5 Financial Lies You Need to Stop Telling Yourself

20160810

GST – How does it affect different sectors?

20160407

How to leverage Workmen Compensation Insurance Policy for labor injuries and disputes?

20160224

Union Budget 2016 – What the street expects from the FM

20160129

Child Insurance, Protect what you have

20160128

What Advantages Are There in Investing in the Indian Commodity Market?

20160120

India Needs To Brace Itself For a Predicted Currency War

20160112

January & Sensex: What is the Saga?

20160107

The Importance of Home Insurance

20160107

Secure Your Wealth – An Investment Guide for Beginners

20160105

Making a Travel Insurance Claim: Questions to Ask Yourself

20151218

Why have bonus shares nearly died out in the Indian capital markets?

20151202

10 ways to diligently invest your money

20151126

Are you still in love with Fixed Deposits?

20151123

How systematic are your SIPs?

20151106

Would Shanghai trigger another global economic meltdown?

20151028

How the Chinese market turmoil has impacted the Indian Rupee

20151007

The Fed interest rate hike factor has dimmed again – but has it become laughable?

20150520

Trading vs. investing in Indian stock markets

20150428

Job loss insurance – Your cover for potential pink slips

20150413

How simmering global events can affect Indian capital markets in the coming days

20150406

Is Nifty eyeing 10,000 by the third quarter?

20150226

Union Budget 2015 - Sector Watch

20150224

Budget Day: Why markets need to remain open on Saturday?

20150217

Who gains the most from lower oil prices?

20150122

At $1200 an ounce, is gold a safe bet compared to Indian equities?

20141118

Wondering about the relevance of ULIPs? Probably it is time to rethink!

20141111

Is there a fed rate hike looming over the markets?

20141106

Are the markets heading for a deep correction?

20141105

49% FDI in Insurance Sector: Mixed reactions

20141104

How does the Modi government impact the real estate!

20141021

Sector Prediction for next 5 years: Real Estate

20141016

10 things about coal block allocation that you should know

20141015

In the context of stock markets, what do we mean by long-term?

20141010

Sensex at 27000; Nifty at 8000 - Does D-Street actually justify these big levels?

20141003

5 Safe Post Office Saving Schemes: Safe Zone For Investors

20141003

Afraid of credit card penalties? No more penalties now in 5 simple steps!

20140930

Getting married and worried about financial planning? Drop all worries now!

20140929

Not shopping online? Know what you are missing out!

20140926

5 schemes that are going to save your tax expenditures

20140924

Do you have idle money in your bank account? Opt for Auto FD

20140923

5 reasons that make Maruti cars the most suitable for Indian needs

20140917

The Ukraine Crisis – All that you need to know

20140915

5 major events that pulled Nifty above 8000 mark

20140911

Want to buy a refrigerator or TV? Manage your money by opening a Recurring Deposit account

20140905

10 Incidents That Prove Global Events Impact Indian Markets to a Great Extent

20140904

5 Intelligent Ways To Invest in Mutual Funds

20140903

5 reasons why you should invest in Gold

20140901

A few basic tips to invest wisely in stocks

20140827

SIP –Proxy to Equity Investing?

Page  of 
First Page Previous Page Next Page Last Page
Go to