Friday, November 15, 2024
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How the stock market reacts to monsoon in India? Know the reason

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Shillong, June 25: Mumbai, the financial capital of India, is currently experiencing a significant surge in two aspects. Firstly, the stock markets are trading at new lifetime highs. Secondly, the arrival of the monsoon seems to be delayed.

Part of the delay in the monsoon can be attributed to the recent cyclone ‘Biparjoy’ that made landfall in Saurashtra and parts of Gujarat, causing substantial devastation. While the cyclone brought rainfall to Maharashtra, Rajasthan, and Gujarat, it was not part of the monsoon. In fact, the cyclone pushed back the onset of monsoon.

On Friday, the markets cooled off and experienced further losses following the previous day’s downturn. However, the arrival of monsoon showers in Mumbai the next day had a positive impact on the temperature and provided a sense of relief.

Although the monsoon was delayed, it did not have a significant impact on the markets, which continued to reach new heights. The markets have matured enough to understand the unpredictable nature of the monsoon and its impact on various factors. They do not react hastily to such developments and consider multiple factors before making any decisions.

However, if the progress of the monsoon remains weak and fails to cover large parts of the country in the next two weeks, concerns may arise. The sowing of crops, particularly wheat and rice, could be affected, impacting the economy, GDP, inflation, rural demand, and disposable income. In such a scenario, markets would react negatively.

In the past, there have been instances of delayed monsoons followed by a revival. Currently, there are conflicting views from different meteorological sources regarding the monsoon’s outlook. It is still early days, and more time is required to assess the situation accurately.

With the influence of global warming, uncertainties and fluctuations in the monsoon pattern are expected. However, technological advancements provide farmers with additives that can adapt to the changing rain cycle and suit their sowing needs.

In conclusion, after a brief pause in the market and the delayed monsoon, rain has finally arrived in Mumbai and Maharashtra. It is crucial to closely monitor the situation as the monsoon progresses. While there is some delay, it is still within a manageable range and can be compensated for. Let us remain optimistic and hope for a steady advancement of the monsoon in the coming days.

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