AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- The overall market sentiment was negative.
- S&P500 marked its worst show since September 2020.
- BOVESPA put up the worst show for the month.
The month of September has seen far more corrections in equity markets than any other month of the year.
Since 1950, the Dow 30 has averaged a decline of 0.8% during the month of September, while the S&P 500 has averaged a 0.5% decline.
This has prompted experts to coin a term for this market anomaly – which has no correlation to news/events of the market – the September Effect. The anomaly is applicable to all the markets across the globe and is not specific to just Wall Street.
Over the past 25 years, for the S&P 500, the average monthly return for September is approximately minus (-)0.4%, while the median monthly return is positive.
But how were things this September?
They were not that bad, but bad enough to become noticeable. One of the most keenly watched indices across the world – Wall Street’s S&P500 – witnessed its worst monthly show since March 2020, when there was a bear run in the global markets owing to the onset of the COVID-19 pandemic.
Since then, there has hardly been a month when global indices have given negative returns. But then came September 2021. While there were some indices that made gains during the month, but they were cornered towards India, China and Russia mostly. Most other indices were in deep red, led by Brazilian BOVESPA – which was down 6.57%.
The losses in Wall Street indices ranged from 4% to 6%. In Europe, the losses ranged from 0.47% to 6.19%.
Bottom Line
The negative trend in September came at a time when markets were witnessing an unprecedented bull run owing to the overdose of liquidity in financial markets.
October has a reputation for violent sell-offs but overall, it typically heralds the start of better seasonal performance for stocks. The S&P 500 averages a 0.8% gain for the month.
