Stock market in October: Why Sensex, Nifty may close in green in holiday-shortened month

After declining more than three and half per cent in September, the domestic equity market may close on a high note in October, indicated historical data of 30-share Sensex. In the past 10 years between 2012-2021, the Sensex had closed in the green on eight out of 10 occasions, according to the exchange data.  

Between these years, the S&P BSE Sensex also witnessed some spectacular closings in October—the Sensex ended higher by 4.06% in October 2020, while it gained 6.17% in October 2017 and a whooping 9.21% in October 2013. It declined by 4.93% in October 2018 and 1.37% in October 2012.    

Meanwhile, the Sensex was trading higher by around 0.7% so far in October 2022 as on Tuesday.    

Previously, snapping three negative months of closings, the Sensex had surged 8.58% in July 2022 and 4.42% in August 2022.    

"In the last eight out of ten years Sensex has given positive returns in October. Also, markets have a record of troughing out in October. This may happen this October too," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.  

Explaining the rationale further, he said the ‘risk-off, risk-on’ texture of the market is in response to fast-changing economic and market signals.    

He said the market sentiments have turned positive for the near-term with declining trend in dollar and US bond yields.    

Geojit Financial Services Chief Investment Strategist said this may also draw back Foreign Institutional investors (FIIs) back into the Indian market.    

"If this trend continues FIIs will again turn big buyers in India and they will not get stocks cheap," said Vijay Kumar   

On investment opportunity in the current market scenario, he feels financials and autos may again lead the uptrend since their fundamentals and prospects are strong. "Capital goods are likely to join the rally and telecom is on strong wicket too," he added.    

Stock Market Holiday 2022, Diwali Muhurat Trading 2022

The Indian equity market (NSE, BSE) will see three holidays this month, starting October 5, when the markets will remain closed on account of Dussehra. Besides, BSE and NSE will be closed on October 24 and October 26 on the occasions of Diwali and Diwali Balipratipada). It is to be noted that though the market will remain closed on October 24, muhurat trading will take place on Diwali day, the timing for which is yet to be notified by the exchanges.