Monsoon affect the share market?

Hi,

Does the monsoon affect the Indian share market?. Because the agriculture product’s growth is based on the yearly monsoon changes.

According to a business-standard study, markets are unaffected by poor rains.

The article says that Correlation between India Meteorological Department- IMD’s April predictions and calendar year returns on S&P BSE Sensex is -0.34, suggesting monsoons have had limited effect on market returns for a given year.

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However, they may have an impact on economy as:

  • Monsoon rains are critical for the farm sector, which accounts for about 15% of India’s US$ 2.5tn economy, and employs more than half of the country’s 130 crore people.
  • Poor monsoons delay planting, and produce smaller yields of crops such as rice, corn, sugar cane and oilseeds (also known as Kharif crops). That can accelerate food inflation, a key focus for the central bank seeking to lower interest rates, and a disaster for the millions mired in poverty.
  • Monsoon rains are critical for the farm sector, which accounts for about 15% of India’s US$ 2.5tn economy, and employs more than half of the country’s 130 crore people.
  • Poor monsoons delay planting, and produce smaller yields of crops such as rice, corn, sugar cane and oilseeds (also known as Kharif crops). That can accelerate food inflation, a key focus for the central bank seeking to lower interest rates, and a disaster for the millions mired in poverty.
  • Groundwater levels will continue to fall dangerously, and droughts will persist unless the agriculture sector, which accounts for 80% of water consumption, starts using water more efficiently. Reservoirs are necessary for providing drinking water, irrigation for crops, and power and water for industries is replenished largely on account of the monsoon.
  • The impact even ripples overseas, as commodity markets are starved of Indian sugar and rice. India’s agricultural season runs from …

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