Will Bulls remain in control in July? History says Nifty 50 has a 72% success rate
July historically benefits the Nifty 50, showing gains 18 of 25 years. With a 72% success rate and an average return of 2.19%, macroeconomic factors promote positive momentum this July, though seasonality shouldn't be the sole trading strategy.
Stock market outlook: Historical trends suggest July has been one of the strongest months for the Nifty 50, raising expectations that the benchmark index could continue its positive momentum this year. Over the last 25 years (2001-2025), the Nifty has delivered positive returns in 18 out of 25 instances, translating into a 72% success rate. The index has generated an average return of 2.19% in July, making it the third-best performing month after December and November, according to Jahol Prajapati, Equity Research Analyst at SAMCO Securities.
While the historical pattern is encouraging, Prajapati cautioned that seasonality alone should not be treated as a trading strategy. Instead, it reflects recurring catalysts such as the onset of a normal monsoon, improving expectations around first-quarter earnings and resilient domestic liquidity, which have historically supported market sentiment during the month.
The year-wise data also underlines July's strong track record. The Nifty declined 3.16% in July 2001 and fell a steeper 9.35% in 2002 before rebounding with gains of 4.56% in 2003 and 8.42% in 2004. It advanced another 4.13% in 2005 and posted a marginal gain of 0.48% in 2006, followed by returns of 4.88% in 2007, 7.24% in 2008 and 8.05% in 2009.
Moreover, the index remained in positive territory with a 1.04% gain in 2010 before slipping 2.93% in 2011, 0.95% in 2012 and 1.72% in 2013. It then returned 1.44% in 2014, 1.96% in 2015, 4.23% in 2016, 5.84% in 2017 and 5.99% in 2018. July 2019 proved to be an exception, with the benchmark falling 5.69%, but it rebounded with gains of 7.49% in 2020, 0.26% in 2021, 8.73% in 2022, 2.94% in 2023 and 3.92% in 2024 before declining 2.93% in July 2025. Overall, the Nifty posted gains in 18 of the last 25 Julys, resulting in a 72% success rate.
Macro tailwinds strengthen the historical trend
According to Prajapati, the current macroeconomic backdrop also supports the historical trend. Crude oil prices have cooled to around the $72 per barrel mark amid easing geopolitical tensions and expectations of a US-Iran deal, reducing input costs and inflationary pressures. At the same time, the rupee has started stabilising after a volatile start to the year, while foreign portfolio investor (FPI) selling has moderated, improving institutional flow dynamics. Together, these factors provide a constructive backdrop for Indian equities, provided global risks remain contained.
Historical monthly performance also reinforces July's strength. The Nifty has recorded average monthly losses of 0.47% in January and 0.74% in February, while March has also seen a marginal average decline. Returns have generally turned positive from April onwards, with the benchmark delivering average gains of 1.94% in April, 1.04% in May and 1.25% in June before rising to an average of 2.19% in July. Average gains have remained positive in the subsequent months as well, with August returning 1.12%, September 1.60% and October 1.10%. November has historically generated an average return of 2.50%, while December has been the best-performing month with an average gain of 2.61%.
What should investors do?
For investors, Axis Securities has recommended maintaining 10-15% liquidity to deploy during market declines in a phased manner. The brokerage advised investors to gradually build positions in high-quality companies with strong earnings visibility and an investment horizon of 12-18 months.
Axis Securities described the broader market outlook as cautiously constructive. Brent crude has fallen to around $73 a barrel following the ceasefire in West Asia, while bond yields have eased and the Nifty 50 is trading close to its long-term average valuation of 18 times forward earnings. The brokerage has maintained its December 2026 Nifty target at 27,220, implying around 20% upside from current levels. It has also projected a bull-case target of 28,615 and a bear-case target of 23,030.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.