Sensex 2013-16

 

Does this artwork have much to do with the stock market? Probably not. But I am a sucker for a nice mandala.

 

At the end of 2012 the Sensex was around 19500 within the bounds of the range it had maintained since late 2010 and over double its post financial crisis lows of March 2009.

Not an awful lot has happened in that time and values have been maintained perhaps at a higher level than is justified

2013 

This mood continued throughout January 2013. Although there were deep seated concerns regarding such things as corruption, there was still positive sentiment for the market as a whole.

 The market did adjust a bit though in February and there was some fluctuation in March as it endeavoured to find a new base.

April sees even more uncertainty and volatility as evidence was creeping in that there may be some change in India’s prospects even while there was an increase in risk acceptance globally again.

But May saw a resurgence in enthusiasm, even to excess.

A short term peak was reached around June though, and the market fell as new information suggested problems for India.

In early July the buying started again. But sentiment was more mixed and as a result the index must more susceptible to bad news.

 As a result there was more volatility, with a fall in the Sensex accompanying the fall in the Rupee in August. At the end of that month the index was around 18,000- 10% lower than 2012 but still much higher than 2009. 

In September there was some recovery as the uncertainty continued and the new RBOI head instilled some confidence. Indeed the market made a 12 month high during the month.

 

October, however does not look to be so positive. There is more uncertainty and some more noticeable negative sentiment.

There is less volatility in the last two months, but still no direction, the upside is weak but the downside in wait and see mode.

2014

 But it is a short respite. Early 2014 sees the return of sudden events and consequent price fluctuations. There is  a feeling of that the market is dragging its feet.

However the balance of the first three months is still positive as there still seems to be big chucks of money being invested in the market.  

Unsurprisingly we will see fluctuations and volatility again in the run up to the elections throughout April at least.

 Expect these to be followed by inertia in May.

 This inertia lasts into June, when it is offset by optimism and big investment in the future.

July and August is characterised by optimism and growth in the index.

September is more mixed with a return to the volatile conditions and competing moods for investors.

October to November is an absolutely critical time seeing a big change in the way the index is viewed.  We see the same themes of big change in the currency – something big must be in the offing.

December is moderately positive and stable as the new conditions embed.

 

2015

January and February of 2015 are very mixed. There is a return to volatility again and a lack of clear direction despite the fact that the longer term mood is one of market expansion.

March to May is a further positive time; perhaps too much liquidity and too much naivety mean that the market moves higher.

Although there is some investor doubt in June the bigger picture is saying that the index will rise – perhaps even excessively – there might be a bubble – although this might be the result of currency issues rather than fundamentals.

The same conditions run into August and September, though they start to tail off in the end of that period as the market consolidates.

The last quarter of the year starts with some inertia and disagreement between parties about where it will go next.

The latter part of the period is characterised by more of the volatile conditions as on the one hand exuberance is maintained but on the other there is a sense of caution returning.

2016

 

In January 2016, sentiment is more negative and volatility noticeable; there may be the need to manage the level of trading.

February and March is better, there is less volatility as the index tries to find its right short term value within the context of the longer Indian and global trends.

There may be a technical issue in April and May and indeed there is a possibility that there could be a fraud or deception of some sort relating to the trading platform.

As a result June is mixed at best. There are some challenges to value as confidence may have been somewhat lost.

There may be some more technical issues in the next three months, but investors are more reassured and there is now likely to more positive buying.

 September itself sees the beginnings of a new environment though it will be a whole year before it becomes clear that this is a permanent rather than transitory change.

October and November see deep seated changes that will result in the re-evaluation of many stocks though not necessarily a change in the overall value of the index. The new environment means that some companies will suffer and some benefit and this is reflecting in the shifting picture.

This really continues to the end of 2016, with shifting out of some stocks and into new areas, there are some big investments being made in some areas but any excess froth in the market is controlled by the downgrades elsewhere.