Keywords
Stock Market Index
Indian Meteorological Department
IMD
Long Period Average
LPA
Weather
How to Cite
Abstract
The Indian Nifty is one of the major financial indicators showing daily economic changes in the share market. The Nifty is affected by many factors, including rainfall. Rainfall variability is one of the systemic risks for the Indian economy. India is the only country that experiences all of the world's weather variations, and rainfall has a significant impact on the economy. India is still a developing country and it depends on the monsoon for economic development. The equity market is one of the leading economic indicators and it should be influenced by the monsoon in India. The Efficient Market Hypothesis is one of the modern investment theories, and it states that prices of stocks quickly adjust to all the available information. Rainfall is one of the weather factors that show revenue direction for the rainfall dependent industries. Normal rainfall increases farmers' purchasing power and improves trade balances by increasing exports and decreasing imports. The deficit rainfall results in higher prices of goods and it leads to higher inflation. Higher inflation adversely affects the economic development of a country. According to the Indian Meteorological Department (IMD), total quantum rainfall of less than 90% of the Long Period Average (LPA) indicates drought; 90% to 96% of the LPA indicates normal rainfall; 104% to 110% of the LPA indicates above normal rainfall; and more than 110% of the LPA indicates excess rainfall.
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