April is the third worst month of the calendar year, if history is anything to go by, with October giving negative 2.4% returns, September 1.1%, April 0.9%, and March 0.3%. One should not expect anything from April save volatility with big intra-day swings.
The average returns in April between 1991 and 2007 stands at a negative 0.9% but between 1998 and 2007 that figure shoots up to a negative 1.5%.
There is a probability less than one of positive returns in April. The probability has remained the same between 1998 and 2007.
If we take into account the years when April ended in positive we get two situations. 1. For the period since 1991 to 2007, April has given a positive return of 4.2%. 2. For the period between 1998 and 2007, the positive returns in April amounts to 6.8%. If we take into account the average returns of all positive months since 1991 it stands at 7.6%.
If we take into account the years when April ended in negative we get two situations. 1. For the period since 1991 to 2007, April has given a negative return of 6%. 2. For the period between 1998 and 2007, the negative returns in April amounts to 5.7%. If we take into account the average returns of all negative months since 1991 it stands at 5.8%.
The average FII flows in April have also been erratic. In 2003, FII flows in April stood at Rs 1,208 crore, 2004 Rs 4,173 crore, 2005 negative Rs 1,047 crore, 2006 Rs 589 crore, and 2007 Rs 5,432 crore.