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Indian Monsoon and its impact on the NSE share market

Indian Meteorological Department has predicted "deficient" monsoon and revised its forecast from 93% to 88% for this year i.e. 2015-16, triggering fears of bad harvest and food price inflation.

Sai Stocks the best Stock tips Provider in National Stock Exchange track India market 365 days a year. Indian Monsoon, which brings rainfall for 4 months in a year i.e. June to September, is most important for a Developing Indian Economy and its Stock market. Our team Every year track moonsoon seaon and Study the Impact of monsoon season on NSE Share Market. The agriculture sector is the backbone of the Indian economy and thus, monsoon should be considered as the backbone of Indian Economy as any changes in moonsoon effects our indian economy. 50-60% of India's Population still depends on Agricultural sectors for their daily living. Agriculture sector is again dependent on India Monsoon as 75% of Indian Land gets water through Rains. The production of food grains depends on the amount and distribution of monsoon rainfall over the country.


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Why Monsoon Season is Important for Indian Economy.

In the present day Indian economy is going through a tough phase, hence a lot depends upon a good monsoon season. Annual rainfall is very important for the farm outputs because more than 55% of the cultivable land depend on the monsoon rainfall. About 15 percent of the Indian economy is based on the farm sector products, good rainfall ensures high production of the farm products which accelerates the economic growth of developing country like india. This year rainfall has been 23 percent less than the average rainfall and it is having an adverse effect on the country’s economy. Due to less rainfall this year there is a delay in coming of the summer crops such as rice, oilseeds, pulses and cereals. These crops play a very important role in the growth of the economy. Agricultural land, sustain about 55 percent of the population, thus rainfall becomes a very necessary factor for the flourishing of the agricultural lands in India.

Crop Production and Monsoon Impact on Stock Market

India is mainly an agricultural country with over 70% of its people directly related to farming. To sustain agriculture the land requires adequate rainfall in each season. A Sufficient and Good monsoon Season is favourable for farmers of India while poor or insufficient rainfall can cause crop failure. Deficient monsoon from the start of current season has not only delayed sowing but also led to a decline in the average of most kharif crops viz rice, pulses, cereals, oilseeds and cotton. Total area sown is nearly 50% per cent lower compared with the corresponding period a year ago. May to July rainfall is very important for the Kharif crops and is account up to 40% of the total farm output of the country. Drought or excess rainfall during these months ensure delay and decrease in the production of such crops. Sowing of these crops occurs in July but due to less rainfall, farmers had to delay the sowing period. Monsoon influences many other crops across the country. Soya bean, sugarcane, cotton, rice and millet are some of the crops that flourish when rainfall is good. The country’s economy gets a boost and it is able to maintain its GDP Gross Domestic product of indian Economy in the wake of a good monsoon. If GDP improves the indian nse stock market gets boost and vice versa. Higher Food Production Leads to Surplus so the Goverment can Exports the Surplus productions to gain foreign Currency which ulimately boost stock markets in India.



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Effects of Normal / Erratic Rainfall

The production of crops and grains gets a boost when rainfall is normal. Even if the monsoon is delayed by few days, it can have an adverse effect on the indian economy as about half of India's farm output comes from crops sown during the June-September rainy season. A good crop indirectly curbs inflation in an economy. Monsoon is a key to determine agricultural output, inflation, consumer spending and overall economic growth. While a normal rainfall signals growth and prosperity, a below normal rainfall could spell disaster making food more expensive, aggravating the power, water shortage, hitting industrial production which in turn will put more pressure on the government's kitty. A good monsoon will boost the agriculture sector, resulting in bumper crops, bring down the prices of vegetables, cereals and essential commodities. Goverment can remove the export ban on several commodities and reduce the country's dependence on imports. This will bring more Foreign Exchange for boosting Indian Economy. A good monsoon increases their purchasing power of the people, whereas a drought can lead poor income and an additional burden on the government coffers with an increase in subsidies for the poor people in the economy.



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Why Monsoon is Important for Growth of Share Market in India.

70% of India's Population Directly Depends on Farming. Each and everyone in India looks forward to the monsoon season every year.

  • The Production of crops and grains gets a boost when rainfall is normal.
  • Better Moonsoon results in Bumper Corp which reduces prices of vegetables, cereals and essential commodities.
  • Moonsoon boost Hydro Electric industries and improve the power situation in the Economy.
  • The country’s economy improves as GDP Gross Domestic Products increases due of a good monsoon.
  • Drought leads to poor income and burden on the government coffers due subsidies for the poor, but a good rainfall brings a boost to the economy resulting in Growth of Economy, which brings positive trend in share market.
  • Monsoon is a key to determine agricultural output, inflation, consumer spending and overall economic growth in Indian Economy and Share market.
  • Nse Stock Market of an Barometer of Indian economy, Since Majority of Indian Economy Depends on Moonson, Stock market trend can change depending on Changes in Moonson Season.


Past Performance of Share Market Tips

Sai stocks has provided the above information on how the moonsoon can impact the nse share market for Knowledge of Upcoming and New Stock Market Traders who have just started trading in Indian Market. This information can be used by them to trade in nse listed stocks and make money in stock market . If meteorological department predicts a good moonsoon, they should be sure of upward trend in the share market. If the same meteorological department predicts of bad moonsoon or abnormal monsoon, they should expect a downward trend in indian nse stock market. Our Experience Expert team has a list of stocks whose price flutuates due to changes in monsoon Season. We track movement in this stocks during monsoon season and provide accurate share tips for Intraday Traders in these stocks for intraday traders.


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