During holidays, people generally tend to spend more. You may have noticed that companies experience increased sales during holiday periods, and if sales rise, it also affects the stock market. Therefore, in this article, we will explore how holiday spending habits influence stock market trends.
Why Do People Spend More During Holidays?
Spending during holidays is a common habit, as people usually go out with their family or friends, leading to expenses on items like clothing, gifts, food, and various other expenditures.
During this time, businesses in different sectors often provide special deals and offers, motivating people to spend even more. Thus, holiday spending habits not only create a time of joy and festivity but also boost businesses.
You might be wondering if increased sales during holidays affect market volatility. The answer is yes; let’s understand why.
Do Holidays Impact Stock Market Volatility?
Yes, news and events occurring during holidays can impact the stock market. For example, economic or political news during holidays can increase volatility.
It is also crucial to note that different holidays in various countries or regions may have different effects on the stock market. For instance, the impact of holidays on stock market volatility may vary between countries, as each market responds differently to increased company sales and the economy during holidays. While holidays can influence stock market volatility, it’s not the sole factor behind increased volatility.
Holiday Spending Insights
According to a survey conducted by Rakuten Insight in November 2023, it was found that in India, most people plan to spend over Rs 8,000 on shopping during holidays. However, not everyone follows this trend, as 3% of the respondents did not consider spending on shopping during holidays.
You can understand the detailed data of this survey from the image below, depicting the percentage of people who planned to spend how much during holidays.
By November 2023, a majority of people planned to spend over INR 8,000 on shopping during holidays.
Impact on Sectors During the Holiday Season
Retail Sector: The retail sector is a prime example of increased sales during the holiday season, with significant sales of various clothing, shoes, and gift items. This season witnesses growth in the retail sector, leading to substantial profits for different retail companies.
Tour and Travel Sector: Expectations of growth are high in the tour and travel sector during the holiday season, as many people plan trips, benefiting hotels, online tour booking companies, tour agencies, and other related businesses.
Airlines and Transportation: The airlines and transportation sector anticipates growth during the holiday season as people take flights and use transportation services for holiday travels.
Apart from these, increased spending on food, clothing, gifts, decorations, etc., during holidays benefits various sectors, including FMCG, finance, and banking.
Conclusion
It is evident that investor activity during holidays can lead to changes in market volatility, affecting stock prices. This volatility’s impact is more pronounced in sectors such as FMCG, retail, tourism, finance, etc., as increased purchasing during holidays typically benefits these sectors.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
