JM Financial Research Report:The last three months of last year were not good for the main index of the Indian stock market, Nifty 50. There was a decline in this for three consecutive months. But the first month of the new year may be about to change this trend. This estimate has been expressed by the Technical and Alternative Research team of investment banking firm JM Financial in a recent report based on the analysis of the last 20 years of Nifty 50 data. It has been said in the report that in the last 20 years, this has happened only 9 times, when Nifty 50 has witnessed a decline for three consecutive months. The special thing is that all three times the fourth month has brought a rise in the market. It is hoped in the report that if the same trend of data continues, then this time also the trend of decline in Nifty 50 will be broken in the fourth month and January 2025 will end with a rise.
The year ended 11% below September’s high.
Nifty 50 had touched a high of 26,277 last year i.e. in the month of September 2024. But after that, there was a continuous decline in this important index for three consecutive months in October, November and December. Falling from the September high, Nifty closed at 23,658 on December 31, 2024, which shows an overall decline of -11.07%. If we look at the performance of different months, according to the data available on NSE, Nifty 50 closed down by about -2% on monthly basis in December 2024, while it closed down by -0.7% during November and -6.2% in October. A decline was recorded.
Also read: Mutual Fund Portfolio For 2025: Fix your mutual fund portfolio in the new year, never forget these 7 things
This happened only 9 times in 20 years
According to the report of JM Financial, this has happened only 9 times in the last 20 years, when Nifty 50 has declined for 3 consecutive months. The special thing is that every time, after three consecutive months of decline, a strong recovery has been seen in this index in the fourth month. That means the fourth month has ended with a rise in Nifty 50. You can see the figures of monthly returns of Nifty 50 for all these four months and during that period here:
Also read: SIP Magical Return: Fund of Rs 4.13 crore collected from SIP of 2000, lump sum of Rs 1 lakh became Rs 1.88 crore! 30 years journey of HDFC Flexi Cap
Fourth month after 3 consecutive months of decline in Nifty 50. monthly closing return
- 1. December 2008: 7.4%
- 2. October 2011: 7.8%
- 3. June 2012: 7.2%
- 4. September 2013: 4.8%
- 5. March 2019: 7.7%
- 6. September 2019: 4.1%
- 7. April 2020: 14.7%
- 8. July 2022 : 8.7%
- 9. March 2023: 0.3%
Also read: Gold Rate Today: Gold increased by Rs 330 and closed at 79,720, silver rose by Rs 130, how is the long term trend, what should investors do?
Will the 20 year trend continue this time too?
According to this report prepared by JM Financial Institutional Securities Limited, the combined monthly average return of all the above mentioned 9 months has been 7%, while 6 times this return has been more than 7%. The lowest return of 0.3% was seen in March 2023, while the highest return of 14.7% was seen in April 2020. ReportIt has been said that since Nifty 50 has once again seen a decline for 3 consecutive months in October, November and December 2024, hence considering the trend of the last 20 years, Nifty 50 will once again fall in January 2025. There is every expectation that the closing of Rs 50 will be bullish.
Also read: NFO Alert: Subscription started in new quant fund of UTI Mutual Fund, what is special in this NFO, should you invest?
What are the risk factors?
In this report prepared by Neeraj Aggarwal of JM Financial, the possibility of Nifty 50 ending January 2025 with a rise has also been mentioned along with the risk factor. According to the report, worse than expected quarterly results of companies may reverse this possibility of recovery. The December quarter results of major large cap companies are to be released in January 2025.