Can Nifty, midcap stocks, F&O shares Polycab, Birlasoft, JSPL, NMDC deliver strong returns in Dec?

December has historically been a positive month for the domestic stock market, with Nifty delivering positive returns in six of the past 10 occasions while the Midcap index delivering positive returns in seven occasions. A few futures and options (F&O) segment shares such as Polycab India Ltd, Birlasoft Ltd, Jindal Steel & Power Ltd (JSPL) and NMDC Ltd have a history of delivering positive returns during the month. These stocks ended higher in nine of past 10 occasions. Will the history repeat?

"Our analysis indicates that the Nifty has exhibited an average price seasonality in the month of December. In the last 10 years, the index has closed in the green on 6 occasions with an average and median return of 1.4 per cent and 0.5 per cent, respectively," JM Financial said. 

JM Financial said the Nifty Midcap index has exhibited even a relatively stronger price seasonality in the month of December. In the last 10 years, the index midcap has closed in the green on seven occasions with an average and median return of 2.1 per cent and 1.8 per cent, respectively. In fact the, midcap index outperformed the Nifty on six occasions with an average outperformance of 0 7 per cent.

The domestic brokerage said sectoral indices such as Metals, Technology, Media and FMCG closed higher on seven occasions, with an average return of 4.1 per cent, 3 per cent, 2.3 per cent and 1.7 per cent, respectively. While the Metals index outperformed Nifty on seven occasions with an average and median outperformance of 2.6 per cent and 4.1 per cent, the Nifty Bank index underperformed on seven instances with an average and median underperformance of 1.9 per cent and 1.4 per cent, respectively.  

Among F&O stocks, Polycab India delivered an average 5.4 per cent return in the past 10 Decembers and closed higher in each of the 10-year period. Birlasoft settled higher on nine occasions and had an average return of 9.6 per cent in past 10 Decembers. JSPL delivered 8.1 per cent average return and closed higher in 9 of past 10 Decembers. NMDC, Motherson Sumi and Siemens ended higher in nine instances. NMDC delivered 7.3 per cent average return, Motherson 6.6 per cent and Siemens 4 per cent.

Escorts Kubota and Jubilant FoodWorks were two stocks that delivered average negative returns of 2.8 per cent and 1 per cent for the past 10 Decembers. These stocks fell on seven of the 10 occasions.