The Month of JULY.

July has always been an important month for the Indian stock market. It is not a month of action usually. It sets the course for next quarter and the end quarter of the financial year. Though the Indian GDP is dominated by service industry, agriculture still supports the majority of Indian population directly. Agriculture in India is still pre dominantly monsoon dependent, specially the kharif crop. It also sets the pace for buying in the next quarter which in India is dominated by festivals and therefore rural buying. Therefore a lot many sectors now from FMCG to automobiles keep their fingers crossed in JULY, for prosperous rural marketing revenue. With sky rocketing food prices this year and the food inflation almost in double digit, it becomes more important that the rain gods smile on the Indian sub- continent. Inflation seems to be a major concern, for the economy right now. Though a good food grain production is not a guarantee for lowering inflation, in fact it may add fuel to it.

July is the earning season too. All the companies declare their first quarter result of the year in this month, therefore setting the expectations for the whole financial year. Therefore it is a wait (wet) and watch month. As far as the Indian stock market is concerned, in July if it does not breach important support levels, its good news for the rest of the year.