Indian Stocks: Can Bulls Overcome 'Sell in May' Trend?
Resurgent in April, can bulls defy 'Sell in May' maxim?
The Economic TimesImage: The Economic Times
Despite the traditional investment advice to 'Sell in May and Go Away,' Indian equities are expected to maintain momentum following significant gains in April. Analysts predict moderate performance in May, with sector-specific movements rather than a broad rally, influenced by high oil prices and a cautious economic outlook.
- 01Indian equities saw significant gains in April, with Nifty rising 7.5% and Sensex 7%.
- 02Historical data shows May has often yielded positive returns for Indian markets.
- 03Analysts expect a range-bound market in May, with Nifty trading between 23,800 and 25,000.
- 04Small- and mid-cap stocks are anticipated to outperform large caps this month.
- 05Rising crude prices and geopolitical uncertainties may limit upside potential.
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In April, Indian equities experienced their strongest monthly gains in years, with the Nifty index rising 7.5% and the Sensex increasing 7%. Despite the common investment strategy of 'Sell in May and Go Away,' analysts from Motilal Oswal Financial Services suggest investors should resist this urge, as historical trends indicate that May often yields positive returns. Over the past decade, the Nifty has gained in six out of ten Mays, while the Nifty 500 index has performed positively in seven out of ten instances. However, analysts caution against expecting a repeat of April's rally due to elevated oil prices and ongoing geopolitical tensions. The average return for the Nifty in May over the past 30 years is 1.84%, which rises to 2.14% when dividends are included. Analysts predict that the Nifty will likely trade within a range of 23,800 to 25,000 throughout May, with small- and mid-cap stocks expected to outperform large caps. Investors are advised to remain cautious, considering the impact of rising crude prices and the upcoming monsoon season on market performance.
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Investors in Indian equities may need to adjust their strategies in light of expected moderate performance in May, influenced by external factors such as oil prices and economic conditions.
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