Does Santa Rally come to the Indian markets? Teji Mandi Explains

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Sensex Down Graph The Indian stock markets are trading flat… Investors monitored the status of a $900 billion Covid-19 relief bill.The Bill has been passed by both chambers of Congress. President Donald Trump signed a $900 billion Covid-19 relief bill into law, averting a government shutdown and extending unemployment benefits to millions of Americans Meanwhile, averages posted flat returns last week. The S&P 500 fell 0.2% last week, The Dow had a mild 0.1% gain. Futures on the Dow rose 106 points, S&P 500 futures gained 0.1%, and Nasdaq 100 futures traded 0.2% higher. The term “Santa Claus rally” was coined in the 1950s, when it became clear that investors were moving their money from stocks to bonds.


From 2014 to 2015 the the 10k race distance and training schedules 500 experienced a decline of 3.01% and from 2015 to 2016, that index declined by 2.27%. Investors may already be reinvesting tax loss harvesting money at the end of December. In the US, it has been noticed that the stock prices tend to rise in the last few days of the year into the first few days of the New Year. This phenomenen has been going on since 1950 and is known as the Santa Claus Rally.

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A lot of the laggards and the not-so great companies have started moving up. From that point of view, I would like to be a bit cautious, says Dipan Mehta, Founder & Director, Elixir Equities. In Germany, at least two dozen Harley Davidson motorcycle Santa Clauses rode a trip for collecting donations for a children’s hospice Dudenhofen (Rhein-Pfalz-Kreis) a welfare center for children suffering from cancer. According to German broadcaster SWR Fernsehen, after the motorcycle parade, the Santas handed 20 bags of gifts to the kids in children’s home Maria Regina in Silz and the Catholic old people’s center in Landau. The Harley Davidson riding Santas club shared the images and footages of the parade on Facebook wherein several Santas were seen riding their motorcycle through the southern Palatinate as the crowd cheered for them and took pictures.

I agree to the updated privacy policy and I warrant that I am above 16 years of age. The actual reason behind the rally is unknown, and this has been a matter of debate for a long time. Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

The “Santa Claus rally” is a term used to describe the tendency of stock prices to rise in December. The phenomenon occurs because many people expect a strong performance during this time of year. While stocks have historically done well during this period of time, they can sometimes experience negative returns if they encounter bad news.

Tuesday night, US government statistics revealed that consumer inflation for November was 7.1%, lower than the average forecast of 7.3% and 7.7% in October. The statistic improved investor mood, which caused the Nasdaq Composite to rise by 2.5%, the Dow Jones index to rise by over 1%, and the Nifty, a derivative of India’s Nifty index traded on the Singapore exchange, to rise by about 1%. A Santa Claus rally is the term commonly used to describe a stock market rise before Christmas. US stock markets were closed on December 26, and on Tuesday, December 27, the first trading day after the Christmas holiday, the S&P 500 closed down by 0.40% while Nasdaq Composite closed 1.38% lower. On Wednesday, equity futures were trading in green but not showing strength for any signs of a Santa rally.

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International are also joining these institutions; even though December is typically a slow month for foreign fund managers, they have already invested over Rs 8,600 crore in equities this month. Every holiday season, articles surface about a bullish stock market phenomenon called the Santa Claus Rally. Respectable financial sites predict that Santa has some helpers to ensure 2022 will see a rally, but it might take more than the Fed’s tactics to fill Wall Street’s stocking this year. However, it’s a confluence of several global and domestic market factors that determines the net trading activity. Like, countering the ‘Santa Claus’ rally is also something called as the January effect where investors purchase stocks in the new year after year-end sell-off for tax purposes,” said Prateek Pant, Chief Business Officer, WhiteOak Capital Asset Management Ltd. At this time, there is likelihood for stocks in sectors such as energy, finance, healthcare, infotech, power, telecom to be affected by this phenomenon.


Data from Cointelegraph Markets Pro showed that the top crypto hovered around $16,800 on holiday. Community members expressed their disappointment by sharing memes, with some even employing their creativity through poetry. Between 1950 and 2019, the Santa Claus Rally happened 76% of the time. The market has grown an average of 1.3% every year throughout that period, according to the 2019 Stock Trader’s Almanac.

US inflation is slowing, which encourages a Santa Clause rally.

The rate cut, if any, as per the current data, may happen only in 2024 is what US Fed has already indicated to the market. However, if inflation continues to decline, as seen in October and November CPI data, the Fed will be able to stop rising interest rates earlier than expected, which will have a significant impact on the market’s trajectory. Although annual inflation surged at its weakest rate in 13 months and US consumer spending hardly increased in November, it is likely that this will not deter the Fed from raising interest rates in 2023. Post-rate hike commentary by Fed chief Powell on December 14 will be crucial as it comes in the backdrop of December 13 US CPI data for November. A sharp decline in expectations of the Fed tightening may open the door for an end-of-year equity market surge else the bears may become more active. Torres is of the view that further downside is likely in December as market investors front-run an earnings recession anticipated for the first quarter of 2023.

  • Greece stock market hit with more losses Greek stocks were down 4.5 percent in early trade on Tuesday, dragged down by another near 30 percent plunge in banking stocks, a day after sustaining record losses when the bourse opened following a five-week shut down.
  • When the total value of imported goods and services exceeds the value of its total exports, then the current account deficit arises.
  • This term has been used to evaluate the stock market terms that have been seen during the last week of December.
  • January 1 is a Sunday and the US stock market will observe a holiday on January 2 for the New Year.
  • Even though it is not guaranteed to work every year, it has worked well in the past and could provide good returns this Christmas season.

The Centers for Disease Control and Prevention on Monday shortened the recommended isolation time for Americans with asymptomatic cases of COVID-19 to five days from the previous guidance of 10 days. China Bear Market 2015 China’s markets fell sharply after a stretch of calmer trading earlier Wednesday, reviving the choppy period of trading from the past two weeks that rolled back some gains from a yearlong bull market. The Shanghai Composite Index closed down 5.2% after trading largely flat earlier, while the smaller Shenzhen market… Early in the new year — but which now starts in mid-December — also provides hope. But Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, warns that the Dow’s surge and small-cap Russell 2000 stock index’s 11% gain in November may signal that Santa “is early this year” and the gift-giving to investors is over.

“The charts, as interpreted by the legendary Larry Williams, suggest that the Santa Claus rally is coming to town next month and you’ve got to get ready for it, or else you may be left behind,” he said. Clickhereto join us on Telegram for trading and investment-related videos, daily market updates, details on upcoming IPOs and more. This comes after the company incorporated a wholly-owned subsidiary – TACC. TACC will manufacture graphite anode for Lithium-ion cells and other advanced carbon and anode materials. For this, the company plans to undertake capacity expansion of ₹2,000 crore over the next five to seven years.

The smart money, the FIIs and DIIs are buying these corrections, which reflects another level of confidence in the Indian story. We are also looking forward to a growth budget, which the Government has indicated will fuel the long-term growth of India. This year, we are expecting a post-Christmas and New Year rally,” Divam adds. Investors are expecting that a Santa Claus rally in the stock market would lessen the pain of a difficult year for US stocks and possibly improve the picture for 2023. So far, the S&P 500 is down by 19% while Nasdaq 100, the tech-heavy index is lower by 33%, in 2022. Interestingly, over the last 3 months, the Dow 30 index is up by nearly 12%.

This ensures that youinvest more at lower prices and less at higher prices, and hence your overallcost of acquisition gets averaged out.Try out investing with SIPs in smallcases for passive,long-term wealth creation. Some megacap companies have roared in the recent rally, with Tesla Inc jumping 0.8% after surging nearly 22% in value over the past four sessions. Apple dipped 0.4% after coming within spitting distance of becoming the first U.S. company to hit $3 trillion in market capitalization in premarket trading. Boeing added 1.9% as Indonesia lifted a ban on the company’s 737 MAX, three years after the crash of one of its aircraft that led to the loss of all 189 people on board. In recent years, some economists have claimed that Santa Claus rallies are not just short-lived events; they predict that they will return each year around Christmas and last through January 4th .


Being the holiday season, some institutional investors take leave, allowing retail investors to be bullish. Though the Santa Claus rally is not limited to any particular country, this is a lesser-known phenomenon in India. But for the last few years, the Indian stock market also started seeing a small upward trend in the last week of December. In the last 15 days of 2020, Nifty 50 gave a 2.2% return, delivering 1.7% in 2019, 0.5% in 2018, and 1.9% in 2017.

If we take history as a guide, the Santa Claus rally is seen in the Indian markets. In the past 16 years, we have seen the Santa Claus rally in Nifty50 13 times. • At the year end, employees in the US earn a festive bonus leading to a high investable corpus, which flows into the stock markets during the end of the year and the new year. According to Business Line, the US markets have seen a Santa Claus rally 34 times in 45 years. Much of the market’s trajectory will be dictated by whether inflation can continue to subside and allow the Fed to stop raising interest rates sooner than it has projected. U.S. consumer spending barely rose in November, while annual inflation increased at its slowest pace in 13 months, but demand is probably not cooling fast enough to discourage the Fed from driving interest rates higher next year.

Similarly, when there is a sell-off in the US markets, the next day, we see the impact of the sentiment in our markets too. Dewey, the founder of the Foundation for the Study of Cycles, noted and studied an oddity in stock prices that occurs only between December 20th and January 20th. Dewey wrote about his discoveries on long-term cycles in the market, explaining that there was exceptional strength in this time period, usually every 2-3 years.

Stock Market Today: Stocks End Down, Dashing Santa Claus Rally … – TheStreet

Stock Market Today: Stocks End Down, Dashing Santa Claus Rally ….

Posted: Thu, 22 Dec 2022 08:00:00 GMT [source]

Advancing issues outnumbered decliners by a 1.93-to-1 ratio on the NYSE and by a 1.20-to-1 ratio on the Nasdaq. Britain and the EU were said to be on the cusp of post-Brexit trade deal. However, several domestic and international market variables interact to affect the net trade activity. For example, the January impact, when investors buy equities in the new year following year-end sell-offs for tax considerations, counters the Santa Claus surge, according to Prateek Pant, Chief Business Officer of Whiteoak Capital Asset Management Ltd. “The FIIs, who have been predominantly driving our markets, is on leave, although the excuse of year-end tax advantages does not apply here.

  • “The Fed Chairman had indicated that he could take his time raising rates.
  • Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended.
  • Santa rallies have taken place about two-thirds of the time since 1993.
  • A ‘Santa Claus Rally’ refers to the phenomenon in which the stock market rises in value during the last week of December and the first two trading days of the New Year.

CDC shortened the recommended isolation time for Americans with asymptomatic cases of COVID-19 to five days from the previous guidance of 10 days. Pramod sir is an experienced person in Markets gives accurate advisory services. Professional Market Trader And Owner Of Dalal Street Winners Advisory And Coaching Services. We Provide Highly Accurate And Professional 1 Entry And 1 Exit Future, Option, Commodity, Currency And Intraday Stock Tips On Whatsapp With Live Support And Follow Up. Worse at -37%, making India by-far the worst performing global market. The website will also help investors the Liquidity, Safety and Return on their Investment in every step and guide to create wealth.

At a time, when the world was yet to fully recover from the Covid shock and economic growth was trying to find ground, central banks had to rush to monetary tightening to tame soaring inflation. Since monetary tightening slows down the pace of economic growth, the risk of a recession in the US and Europe grew stronger. He advises retail investors to take exposure to such sectoral themes or even multi-sector, multi-cap orientation through a diversified portfolio of stocks. Across the world, investors last week offloaded shares at their highest weekly rate ever, selling a net $41.9 billion of equities, according to BofA Global Research. Investors also reduced their cash holdings by a net $59.5 billion, the biggest drop since February 2022 besides selling the largest quantity of investment grade and high-yield bonds in nine weeks, BofA said. If on the SIP date, the stock price is high, you will be able to buy a lesser number of shares.

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