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June to heal investors' May woes

Stock market patterns over the past ten years suggest an improvement in sentiments in the month of June.

india Updated: Jun 04, 2006 11:56 IST

Investors can look forward to some pre-monsoon showers this month, after the scorching sun of May melted away more than $90 billion of wealth from their kitty.

The stock market's historic patterns over the past ten years suggest a marked improvement in market sentiments in the month of June -- a trend that is further quantified by a strong performance put forth by the benchmark Sensex on the very second day of the new month.

As the May sell-off theory has been proved once again this year, the market observers are betting on history to repeat itself again when it comes to an improved performance in the month of June.

The Bombay Stock Exchange's 30-share barometer index recorded a phenomenal jump of 380 points on June 2, the second biggest gain in the history of the stock market after a 422-point rally in March 1992.

Moreover, an analysis of the Sensex movements during the months of May and June shows that a weak performance in the month of May is mostly followed by a relatively better show in June.

While the month of May has caused loss in investors' wealth seven times since 1996, the loss has been recorded only twice in the month of June during the same period.

This year alone the benchmark Sensex lost more than 13 per cent in May, which turned out to be a month of mayhem for investors and caused them wealth loss of more than Rs 4,13,000 crore.