Indian share prices might be buoyed by the Diwali effect.
Investors rocked by volatile stock markets may wish to consider putting their money into Indian shares, according to Fidelity FundsNetwork. The online investment supermarket said Indian companies often benefit from what is known as the 'Diwali effect' at this time of year.
Analysis by Fidelity FundsNetwork shows that in nine of the past ten years, returns on the Indian stock market have improved in the 30 days following Diwali - which is otherwise known as the festival of light and is a major Indian festival celebrated by followers of the Hindu, Sikh and Jain faiths.
The biggest boom in post-Diwali returns came in 2005, when Indian indices rose 12.9 percent, compared to an 8.2 percent decline in the 30 days prior to the festival. The average return in the month before Diwali is 0.26 percent, rising to 6.96 percent in the month afterwards.
Avinash Vazirani, manager of the Jupiter India Fund, told Professional Advisor that he expects India to withstand the worst effects of the global economic slowdown over the months ahead.
"A rapid rise in the number of middle class households and an increase in the government's infrastructure spending are the main reasons why we expect growth to remain resilient in India over the long term," he remarked.
