Stock Market In June: Will Nifty Break Its Silence After A Dull May?

As June kicks off, investors are entering the month with cautious optimism after a relatively quiet May. The benchmark index Nifty moved within a narrow 1,180-point range in May — the tightest monthly band in the last 10 months — and still managed to close in the green, marking its third straight monthly gain.

Even in the final week of May, the index traded within just 402 points — the lowest weekly range in the past 11 weeks. This extended period of low volatility and consolidation reflects a broader sense of indecision among market participants, many of whom await a clear trigger — possibly from global cues or domestic elections — before making their next big move.

Rollover Data Hints at a Breakout
Despite the lack of movement, traders are showing growing interest in carrying forward their positions. Rollover of Nifty Futures in the May series stood at 79.10%, slightly above April’s 79.08% and higher than the three-month average of 78.09%.

“This marginal increase in rollover activity, especially amid a narrow-range series, reflects traders’ willingness to carry forward their positions, possibly in anticipation of a breakout move. It indicates sustained interest and confidence in the market’s underlying structure, hinting at a potentially more active and volatile June series,” said Sudeep Shah, Deputy VP and Head of Technical & Derivatives Research at SBI Securities.

June Seasonality: Positive Bias but Not Without Risks
Looking at historical trends over the past 18 years, June has generally been a positive month for the Nifty index. On 11 out of 18 occasions, Nifty closed positively, delivering an average gain of 4.19%. In the remaining 7 instances, it saw an average loss of 3.80%, resulting in an average return of 1.09% for the month.

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‘Tracking seasonality, over the past 18 years, the June month has often exhibited a positive trend for Nifty. On 11 occasions, the index has concluded on a positive note with an average gain of 4.19%, while on 7 occasions, it has ended on a negative note with an average loss of 3.80%. The average return for Nifty in the June series has been 1.09%. Over the past 18 years, June has consistently shown an average volatility of 7.80 percent for the Nifty index,’ noted shah.

Bank Nifty Also Shows Mixed but Volatile History
The Bank Nifty has mirrored a similar trend. It ended June in the green 11 times over the past 18 years, with an average gain of 4.52%.

Shah also mentioned that, on the flip side, the average loss in negative Junes was 5.63%, leading to a relatively modest average return of 0.58%. However, the volatility for Bank Nifty has been higher, averaging around 9.30%.

Expect a Volatile Ride
Given the historical seasonality, rollover patterns, and current market consolidation, June could be a month of decisive movement. A sharp breakout or breakdown seems likely, especially if triggered by key macroeconomic developments or earnings surprises. For now, market watchers are keeping their eyes peeled for signs that will determine the next big trend.
 

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