My standard month-end post of returns for the Nifty gives a –6.2% return, making it the third negative return in a row and the worst for 2012.
What can we expect for June?
The average return for June is the third best of the year (after December and February) at 1.3%, but with a standard deviation of 7.5% it is known to be a volatile month – returns have ranged from –17% in 2008 to +13.5% in 1997.
We have Greek elections in June which might determine the course for world markets. An election that brings the right wingers to power might mean a lot of sabre rattling and thus, volatility.
Crude prices have softened, but expect inflation to remain high.
June 18 is the monetary policy review, mid-quarter. This is after the WPI inflation numbers come in, which means the RBI gets time to see how inflation has panned out before taking a decision to cut further or otherwise.
Liquidity looks like it’s not so much a concern but we may see a temporary lack of money as the June 15 deadline to file the first tax installment comes in.