Modules for Beginners
The Trading Calendar
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10 Critical Days For All Indian Stock Market Stakeholders
1. First month of every quarter – April, July, October and January.
It’s the time when the quarterly results of companies come out. Companies that are expected to come out with strong financial results see a bounce in their share prices. Short-term investors can take advantage of this trend by buying into shares in the last month of the quarter such as December or March. If you are wondering how to pick up those shares, the figures given by various companies during the last quarter, the expectations of the management for the next quarter, news that circulates around about the company and the mood of industry in general – all these factors, if closely followed up, can give you clues.
2. Last week of february
That’s when the union budget presentation happens. Companies expected to benefit from the provisions of the Budget see their stock prices moving up ahead of the Budget-Day. Investors can buy into such stocks for short term profits. A general follow up of the pre budget discussions that goes around in channels and newspapers should serve as a quick guide to get clues.
3. Diwali Muharat trading
Stock exchanges hold a special symbolic trading session on the occasion of Diwali, which is called Muhurat Trading. The one-hour session is considered auspicious to mark the beginning of the traditional Hindu accounting year, called Samvat.
4. Industry Specific Data
Some industries release sales reports at the end of every month. These reports cause variation in the stock prices. Notable among the industry reports released at the beginning of every month are the automobile industry’s monthly sales reports and cement industry’s dispatch numbers. These numbers would give guidance on the growth trajectory of these industries.
5. RBI’S Review Date
Banking stocks are affected by the Reserve Bank of India’s Credit Policy. Moves by the RBI to tweak interest rates or liquidity always affect banking stocks. The RBI’s Annual Credit Policy is announced in April. The Mid-Term Review of the Policy is announced in July, October and January.
6. GDP Data
Published quarterly . Generally there is a 1 to 1.5 months lag . So data for the 1st quarter will be available by the mid part of the second quarter and so on .
7. Inflation and IIP Data
Both these figures are published by the government for every month.
8. WPI – OR WHOLESALE PRICE INDEX
The Indian WPI figure is released for every week with least time lag. It gives an idea of the week-to-week fluctuations in the prices of all the traded commodities in the country as a whole. The Wholesale Price Index focuses on the price of goods traded between corporations, rather than goods bought by consumers, which is measured by the Consumer Price Index.
9. Last Thursday of the Month
That’s the time when the derivative contracts expire in Indian markets. Generally stock markets witness heavy volatility on derivatives expiry. Depending on the situation, the market may move up or down.The reason for such volatility is due to the cash settlement mechanism of futures contracts and position adjustments by market makers.
10. Dividend Declaration Date:
This is the date on which the company’s board of directors declare the dividends for the stockholders. The conference includes the date of dividend distribution, size of the dividend and the record date.
On the dividend declaration day, the company also announces the record date. The record date is the date on which your name should be present on the company’s list of shareholders i.e. record book, to get the dividend. Shareholders who are not registered as of this date on the company’s record book will not receive the dividend. According to the company, you are only eligible to get the dividends, if your name is on their book till this record date.
The Ex-dividend date is usually two days before the record date. In order to be able to get the dividend, you will have to purchase the stock before the ex-dividend date. If you buy the stock on or after the Ex-dividend date, then you won’t get the dividend, instead the previous seller will get the dividend.
Then finally, payment date is set by the company on which the dividends are deposited are paid to the stockholders. Only those stockholders who buy the stock before the Ex-dividend date are entitled to get the dividend.
With an end to this chapter, we neatly our module on The Trading Calendar in Stock Market. To learn more, stay tuned on Smart Money by Angel Broking.
A Quick Recap
- Derivative contracts expire in Indian markets on the last thursday of every month.
- Inflation and IIP figures are published by the government for every month.
- In the last week of February, the union government presents the yearly budget.
- The RBI’s Annual Credit Policy is announced in April. The Mid-Term Review of the Policy is announced in July, October and January.