As 2024 draws to a close, investors eagerly await the much-anticipated Santa Claus Rally, a seasonal trend that has consistently brought cheer to markets worldwide.
A Santa Claus rally is a seasonal phenomenon that involves a rise in stock prices during the last 5 trading days in December and the first 2 trading days in the following January. It refers to the jump in stock prices in the week between Christmas and New Year’s Day.
During the Santa Claus Rally of 2023, the Indian benchmark index Nifty recorded a modest but positive return of 0.79%, marking its sixth straight year of gains and reinforcing the rally’s reputation as a dependable year-end phenomenon in the Indian market. Historically, this rally has failed only three times in the past 24 years, underlining its reliability in the Indian equity market.
This year, however, the landscape is different. With central banks across the globe adjusting their rate strategies, inflationary pressures persisting and geopolitical tensions casting a shadow, the question arises—will the Santa Claus Rally live up to its legacy?
The Indian markets are feeling the heat this December, with the Nifty index posting negative returns of 2.25% so far. Yet, an impressive 8.5% YTD gain in 2024 keeps the festive optimism alive. Will the Santa Claus Rally bring a festive turnaround? Let’s wait and watch!
For a comprehensive understanding and more insights, please go through our detailed report.