Santa Rally On Cards? What Stock Market's December Performance Over Last Decade Indicates

Historically, December has shown mixed trends over the past decade. The Nifty closed in the green six times with an average return of 1.6%, recording strong gains of over 7% in 2020 and 2023, but a decline of more than 3% in 2022.

The Nifty Midcap 100 performed better, closing positive seven times with an average return of 2.1%, and outperformed the Nifty in six instances. The Nifty Smallcap 100 was even stronger, closing positive eight times with an average return of 2.8%, and delivering significant gains in 2020, 2021, and 2023.

Sector-wise, IT, Metal and Real Estate have historically led December returns, averaging 3.7%, 4.3%, and 3.9% respectively, while FMCG, Energy, Auto, Pharma, and Banking posted modest gains.

Among individual stocks, Steel Authority of India Ltd., Dixon Technologies (India) Ltd., Titagarh Rail Systems Ltd., Jindal Steel Ltd., Persistent Systems Ltd. and Adani Enterprises Ltd. have shown consistent positive performance in December, with average returns ranging from 7% to 12%.

Aditya Birla Capital, ICICI Prudential Life Insurance Co. and Grasim Industries Ltd. have often closed in the red, with average returns between -1% and -1.6%.