Historically, investors generally gain post-Diwali

Investors worried over the recent bear attack on the bourses can look forward to a rewarding month ahead as returns have been mostly better post-Diwali compared to the one-month period till the festival of wealth. If this historic trend charted by the market barometer Sensex in the one-month period before and after Diwali holds true this year also, then the market would reclaim yet again its 20,000-point milestone in the next 30 days. According to an analysis of historic patterns recorded by the Sensex since 2000, the 30-share barometer index has posted an average return of 6.85 per cent in the one-month period after Diwali. This is about five times the average return of 1.46 per cent in the one-month period prior to Diwali. If the Sensex manages to grow by this average, it could achieve a level above 20k, from its current level of 18,907.60 points. The index had first crossed 20,000 level on October 29 and scaled a peak of 20,238.16 on October 30. However, a subsequent downslide on the bourses has brought the index over 1,500 points away from its life-time high. Notwithstanding a fall of 151 points in Muhurat trading and a five-day downslide, the Sensex still managed to record a gain of 3.43 per cent in the one-month period till Diwali on November 9, 2007. The post-Diwali one-month period has always given a positive return for Sensex, while it has been negative twice since 2000 in the prior-Diwali period -- in 2005 and 2000. On other five occasions, the Sensex gained between 3.43 per cent and 11.75 per cent in one month prior to Diwali. Besides, the post-Diwali month has recorded a lower return than the pre-Diwali period only once -- in 2003 when Sensex grew by 11.75 per cent in one month before Diwali and by 1.92 per cent after Diwali.