Market gyrations are common. But could there be some cue for traders and investors from the daily movements over the last several years? Here’s what we found from a comparison of rising days (when Sensex rose compared to previous closing) vs. Falling days (when Sensex fell vis-a-vis previous closing) of the markets. We looked at daily changes of the benchmark over 10,185 days from April 3, 1979 to March 21, 2023.

A 40:60 spread

A typical year has 250-odd trading days. The chart below shows the share of rising days (positive-return) and falling days (negative-return). The last 45 years of data shows that the share of positive-returning days has ranged between 42-61 per cent in a year.

Similarly, the share of negative-return days in a year ranges from 39-58 per cent. Note there have been 7 instances when the index ended the day with nearly no change.

Share of daily gains not high in bullish years

In the last 45 years tracked, the Sensex has gained over 18 per cent on average. Individually, there have been calendar years such as 1981, 1985, 1988, 1991, 1999, 2003 and 2009 when the index gained over 50 per cent. We looked at years with at least 20 per cent gain and there were 18 such years.

But, a big year for markets does not necessarily mean that the share of daily gains are very high in number. In fact, the percentage of days when Sensex rose in such years ranges from 52-61 per cent.

Share of daily losses not high in bearish years

In the last 45 years, the Sensex has lost value (compared to previous year) on twelve instances, including ongoing 2023. Yes, individually, there have been calendar years such as 1987, 1995, 1998, 2000, 2001. 2008 and 2011 when the index lost over 15 per cent.

But, a bad year for the markets does not necessarily mean that the share of daily losses for the Sensex are very high. In fact, the share of days when Sensex fell in such years is 47-58 per cent.

Every drop of water makes the ocean

Many investors rejoice big days in the markets. Similarly, days when markets clock small gains are usually ignored. Look at the infographic below to see how, like in a game of cricket, singles, twos and an occasional four/six keeps the scoreboard ticking.

It’s the small falls that count

Years when the Sensex lost value do not look typically different from years when the Sensex gained. Losses in markets could be bunched up during certain phases, leading to an annual decline. Here is a look at the years when Sensex fell and how the daily losses are distributed over that time.

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