Do #GDP Numbers spook #Sensex?

India is going to witness next general election in few months and things are warming up now with WhatsApp and other social media groups active with political discussions. Recently, in an intense discussion with one of my close acquaintance, a statement was made that Stock markets have rejected the GDP growth numbers reported by the current government and had tanked after the numbers were reported. This of course was followed by diatribe (in WhatsApp messaging though) on the current regime. Laced with the non-indexed assertion on prevailing fuel prices. Referring back to the stock markets statement, this was an important statement because the GDP numbers were pretty good. At 8.2% growth, the numbers indicated a sustained revival of the economy with post demonetisation adjustment.

Image result for sensex

Never shy of such opportunities to explore and validate such assertions with data, I decided to do some quick review of the performance of Sensex on the next day to the announcement of GDP numbers.  A very simple exercise based on the announcement date, time and GDP number fetched from the following sources:

  1. GDP Data –
  2. Sensex Historical Data from good old Yahoo (

Lets look at some of the analysis that came out:

As one can clearly see there is nothing in this data that indicates there is any correlation. In fact the inbuilt CORREL function for Google Sheets gives the correlation as just as 3.41%.

This is a whoppingly low number for correlation against the claims that we hear or the opinions people build.

Now lets look at some of the charts that I created out of this data.

Percentage (gain and Drop) vs. Sensex Date(1)

Lets take another look with a parallel comparison of the GDP gain/loss numbers and Sensex gain/loss numbers.


GDP %age (Gain or Drop) and Sensex %age (Gain or Drop)(1)



If we take a look at data on some specific dates, it gives a different view altogether –

  1. On May 31, 2010 – We had the highest drop of 2.19% while the GDP growth was reported at a handsome 8.6%
  2. From Aug 30, 2011 to Nov 30, 2012 – Markets repeatedly rejected the GDP numbers and closed with a negative bias
  3. On Feb 28, 2011 – This is the day when Sensex gained most in this data set i.e. by 2.58%. Please note that GDP numbers were full 70 basis point lower at 8.2%  against 8.9% that was reported on Nov 30, 2010.

So apart from individual opinions and perhaps biases against certain individuals running the current regime, there is nothing suggesting that there is any reason to complain if the markets tanks (even in absolute numbers) the next day to the GDP numbers announcement.

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