How Monsoon and Indian Stock Market are Correlated

Monsoon plays a imperative role in the economy of the country since the economy of the country depends on Agriculture. Agriculture industry accounts for about 20% of the GDP (Gross Domestic Production) and is largely reliant on the monsoons. Do you know more than 70% of Indian economy is directly or indirectly contingent on agriculture, which is the prime reason for the economic growth of India? More than 50% of India’s agricultural region is rain fed excluding the agricultural territories of Haryana and Punjab. Therefore, a decrease in the amount of rainfall has a direct relation with agriculture as a result of which the country experiences higher inflation rate as the supply of commodities will reduce and demand for commodities will lift that will lead high prices of commodities.

Most of the stock market investors or traders ask how the monsoon can impact stock market or the share prices. There is a very powerful correlation between the monsoon and the performance of the Indian economy along with the stock market because agriculture can manipulate economic growth as it is depended on monsoon. It is true that rains determine the agricultural output as well as the income of the farmers. It has a dominant impact on not only manufacturing, but also services sectors. A poor monsoon or rains not only lead to lower production of commodities and food grains, but also has a showering blow on the entire economy, and stokes inflation. A weak monsoon also impacts on GDP growth of the country so that a weak monsoon is not only dangerous for the economy, but the stock market or equity market as well.  Most of the investors of stock market take help from the market experts who provide tips on the share market like share tips and stock future tips

The effect of poor monsoon is usually tremendous as two third of India population staying in rural India relies on the monsoon for its bread and butter. Abnormal monsoon can also end up the loss of seasonal employment as well as shortage of food since monsoon rains are vital for farm output as well as economic growth in India. Nevertheless, if the agricultural production goes down, then its direct impact will be a turn down in the financial gain of people. The lower production of food grains resulting a rise in the prices of commodities, which will impact on the public spending or investments, government savings as well as foreign exchange reserves of the country. As a result, the share market or equity market performance will also be affected by the abnormal monsoon. You can take help from various sites, which are providing day trading tips so that you can minimize the risk of loss in equity market.

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