Making sense of markets that don't move in sync with the monsoons

The Sensex has often risen despite poor rainfall, and fallen even when monsoons are good

Robust monsoons have helped to buoy the rural economy even though they have earlier had a tenuous link with the overall market performance.  Years with good monsoons have often seen high returns and vice-versa.

An analysis of the monsoon data with the calendar year market returns shows a correlation of minus 0.27. The correlation is one when two variables move in sync. It is minus 1 when they move in the opposite direction.

The data looked at actual monsoon rainfall between June and September. It fell short by 10 per cent of the long-term average in 2014 and 2015.

The S&P BSE Sensex