With the stock market hitting new highs every other day, many market players expect a healthy pullback. However, considering October's track record of producing positive returns for stock market indexes, such forecasts may be overly optimistic. Canara Bank, Delta Corp Ltd, TVS Motor, ICICI Bank, NMDC Ltd, Power Finance Corporation Ltd (PFC), REC, and SAIL are a few F&O firms that have historically demonstrated seasonality and achieved strong returns in October.
According to data published by JM Financial, the Nifty has generated positive returns in eight of the previous ten Octobers, with an average return of 1.7% and a median return of 2.5%. The BSE settled higher in October on nine times, with an average return of 2.1 percent and a median return of 2.2 percent.
Among sectoral indexes, Nifty Bank closed higher nine times, with average and median returns of 3.9% and 3.7%, respectively. The Auto (as recommended by NSE Auto), Metals, and Energy indexes all closed higher in October, with average gains ranging from 2.5 to 2.7%.
FMCG has been the poorest sector index, dropping seven times and producing an average negative return of 0.6%. Among F&O equities, Canara Bank has returned an average of 13% over the last ten October, with an 80% chance of a positive return.
Delta Corp and TVS Motor provided double-digit gains on average, with an 80 percent chance of ending the month on a high note. ICICI Bank, NMDC, PFC, SAIL, REC, GMR Airport Infrastructure, and Manappuram Finance each generated an 8% average return, with a chance of ending higher in October at 80-90 percent.
