Relief Rally In December? CLSA's Vikash Jain Banks On Historic 3% Median Returns For Nifty - Details

Research firm CLSA, on Wednesday, noted that current investor sentiment on Indian equities is bearish, but ded that December should drive a relief rally. A report by CLSA's Vikash Kumar Jain and arsh Agarwal said that month of December has a 'great track record' with Nifty closing positive on three of four times with a median 3% return.

CLSA Report on India: December has a great seasonal track record

"Seasonal tre supports at least a relief rally in December. month of December has a great seasonal track record with Nifty closing positive nearly three-fourths of times over past 30 years and with a 3% median return," Jain's report said.

Noting that light India positioning for FIIs at a time when outlook for China has become uncertain, CLSA report noted that domestic equity inflows remain stey, which 'should help drive at least a relief rally before we face disruptions under President Trump through 2025'. Among ors, report also cited poor earnings performance by D-Street participants as one of reasons behind current bearish sentiment among investors. 

CLSA Report on India: Government spending is expected to pick up

Among ors, report noted that government spending is expected to pick up providing necessary tailwinds to Indian markets.

"A YoY decline in discretionary expenditures by government in 1HFY25 has hurt growth. With state elections ending and rainy season done, we see a 14% YoY jump in 2H to meet annual budget and may help growth," report said. CLSA report on Indian markets comes at a time when indices have been under tremendous selling pressure. From its all-time high of 26,277 on September 27, Nifty is down 10 per cent dragged by relentless selling by FIIs as well as geopolitical tensions.