Little correlation between monsoons and market returns, shows data

The weather department’s prediction for normal monsoons is generally expected to be good news for the market. Its impact over longer term returns seem limited.

Many years during which monsoons were poor saw high returns, while normal or excess rainfall has also coincided with poor calendar year gains, shows data from the past.

The India Meteorological Department (IMD) said on Thursday that it expects rainfall to be within 99 per cent of the long-term average. It typically issues a prediction in April, which it updates as the monsoon draws near.

These predictions have generally been less volatile than actual monsoons.