Investors are likely to follow the age-old stock market phrase which advises to 'sell in May and go away' as market sentiment may remain jittery before the results of the Lok Sabha polls are announced later this week.
The stock market began the week on a negative note as profit taking replaced heavy buying seen in the previous weeks with the benchmark index Sensex on Monday ending at 11,682.99, down 194 points, as many as 24 index stocks closed in red.
The 'Sell in May' adage is premised on the belief that the market has strong growth potential between November and April, while investors sell in May as they book profits.
"The theory was developed as the second half of the year is generally more vibrant and investors usually buy during that period. This year investors are likely to be jittery and some weakness is likely on concerns (about) the election outcome," Bonanza Portfolio Assistant Vice-President Avinash Gupta said.
The country is awaiting the results of the 15th general elections that is scheduled to be declared on April 16.
Historical patterns suggest investor confidence dips in May as players book profits reaped in preceding months.
Analysis of market movements in May over the past decade shows that the Sensex was negative on five occasions.
Every gain alternated with a loss. In May 2008, Sensex gave a negative return of 5.04 per cent. Significantly, the return was in double-digits only once, in May 1999, during the dotcom boom.
