How is Monsoon influencing Indian Stock Market?

Whether you believe it or not but monsoon plays a major role in the growth of Indian economy. India is a country where more than half of the population still depends upon the agriculture sector for their daily living. Agriculture is their profession and only way of earning money. Plus, Indian lands get around 75 percent of water through rains. Thus, the monsoon is very important in the lives of farmers and agricultural workers whose earnings really depend upon it. That’s why monsoon put a direct impact on the Indian economy and the production of food grains.

Monsoon Season & Indian Economy

Monsoon season brings rainfall for 4 months in a year i.e., June to September, is very important for developing the economy and the stock market. But, in the present day, Indian economy is going through a lot which somewhere related to monsoon season.

It is because when there is less rainfall, it delays the arrival of summer crops such as rice, oilseeds, pulses, and cereals etc. And not just the Indian economy but also the Indian stock market also influenced by the monsoon season and crop production.

Monsoon & Indian Stock Market

In order to understand the link between monsoon and Indian stock market, you need to accept that a good monsoon impacts the Indian economy in a positive way. To sustain agriculture the land requires the adequate rainfall in each season otherwise, the chances of crop failure increases. Deficient monsoon not only brings the delay in the average of most kharif crops but affects many other crops across the country like Soya bean, sugarcane, rice, cotton and millet that only flourish when the rainfall is good.

With good monsoon and crop production the country’s economy boost and it is able to retain its gross domestic product (GDP). And as you know the GDP and stock market has a connection between each other.

So, higher food production leads to a trade surplus and gain in foreign currency which ultimately boosts the stock market in India.

Final Thoughts:

It is clear that the stock market has a relation with GDP and if there is a deficit in monsoon, it will directly impact the Indian stock market and economy’s growth. And not just the stock market but also monsoon also determine in agriculture output, inflation, and consumer spending as well.

Hope, this article helped you in a way you expected it to be. Nevertheless, if you have any query or would like to add something up then don’t forget to mention in the comment section below.

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