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Teji Mandi Explains: Historically April is the stock market's best performing month!

Teji Mandi | Updated on: Tuesday, April 12, 2022, 05:22 PM IST

Representative image   |  AFP PHOTO / FRED DUFOUR
Representative image | AFP PHOTO / FRED DUFOUR
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If the past has something to say about the future, there’s some good news for the stock market investors. Data for the past 15 years show that April is the best month for the stock markets! Here’s more to it:

Going By the Past

For the Sensex and the BSE Midcap index, both indices have given positive returns 12 and 13 times, respectively, over the past 15 years in April.

The trend is even more vital in smaller stocks. The BSE smallcap index has given positive returns in the month of April 14 out of 15 times since 2006.

Does the Data Seem Too Good to be True?

Neither the market crash after the Global Financial Crisis (GFC) in 2008 nor the spread of COVID-19 and the subsequent lockdowns was able to dent investor sentiments in this regard.

However, the only exception was April 2019. Due to the uncertainty over the outcome of the general elections, the BSE Smallcap index dipped 2.7% that month. However, Sensex gained during the month.

What Lies Ahead?

While the Sensex and the Nifty have gained a modest 1% till now in April 2022, the BSE Smallcap Index is up by more than 6% in the first 10 days of the month.

One of the critical reasons for this trend is that investors rush to buy stocks in the new financial year. On the first day of FY23, the Sensex, BSE Midcap Index, and the BSE Smallcap Index climbed by 1.2%, 1.4%, and 1.7%, respectively.

Also, retail investors' highest ever inflows in equity mutual funds, receding war issues, and cooling of oil prices may provide support to the stock markets going ahead.

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Published on: Tuesday, April 12, 2022, 05:22 PM IST