Domestic equity benchmark Nifty50 has finished May higher in the last two election years, 2019 and 2014. The 50-scrip benchmark delivered returns to the tune of two and six per cent in May during these years, respectively, according to Zee Business research.

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This time around, when a seven-week voting process is underway in the world's largest democracy, with the counting of ballots set to take place on June 4, many analysts believe history is bound to repeat itself. The crucial month comes at a time when India Inc has staged a mixed bag of financial performances so far for the fourth and final quarter of FY24.

Here's a summary of how the Nifty and Bank Nifty indices have fared in May in election years:

Election Year (May)
      Nifty       Bank Nifty
2014  +6%         +14.5%
2019  +2%         +6%

Now, here's how the month has been for Dalal Street participants over the past 10 years:

Year  Nifty       Bank Nifty
 2023 1.3%        +1.6%  
2022  -6.4%       -3.9%  
2021  2.7%        +3.7%
2020  -3.5%       -10.6%
2019  1.8%        +5.8%
2018  0.9%        +7.6%
2017  1.6%        +4%  
2016  2.1%        +3.3%
2015  0.9%        -0.3%  
2014  6%          +14.5%
     

The blue-chip index as well as the banking sector barometer have finished May higher in eight and seven times since 2024, respectively.

The negative return, when the Nifty Bank slumped 10.6 per cent, was in May during the year marked with the COVID-19 mayhem.

What can drive a rally on Dalal Street in May 2024 ?

Analysts believe a host of factors can aid positive moves in the indices in May 2024:

Positive domestic macros (strong economic data)
Good Q4 results

What market guru Anil Singhvi thinks?

Zee Business Managing Editor Anil Singhvi expects a positive bias to occur on Dalal Street in the first half of the May derivative series, which began on April 26 and ends on May 30, after the Nifty50 finished the April series with a gain of  243 points.

According to the market wizard, the second half of the May series is likely to be impacted by election results.

What technicals suggest?

Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas is of the belief that technicals point that slow and steady upmove shall continue. The expert added that Nifty has been trading in an upward sloping channel since mid-Jan, 2024. The lower end of the rising channel is placed around 22000 – 22100 zone which also coincides with the daily lower Bollinger band and the 20 week moving average. Thus, until this level is not breached on the downside we can expect the slow and steady upmove to continue. 

On the upside, 22776 remains the immediate key hurdle to watch out for, and beyond that potential upside is possible till the psychological level of 23000. Seasonally, May month has provided mixed signals if we analyze the data of last 5 years however it tilts in favor of Bulls against the popular myth of Sell in May. In the case of a breach below 22000, the next crucial support zone is placed at 21270 which is the 38.2% Fibonacci retracement levels and the weekly lower Bollinger band, he adds.