Research Question:
- Is there any Relationship Between Average Annual Rainfall in India and Sensex Growth Rate? (Refer: Figure-1)
Introduction:
Usually, We know that if good rains come; It results into better agricultural productivity; in turn resulting into better GDP. If this is the relationship between Rainfall and GDP; what would be the Relationship between Rainfall and BSE Sensex? Is there any relationship, that means, if good rains come, does Sensex also zooms up that Year? The statistical results are saying “no”. See the Following Description and the Answer.
Figure-1: Avg. Rainfall and Sensex Growth Rate
| Year | Average Rainfall | Sensex Return % |
| 2004 | 87 | 13.08 |
| 2009 | 78 | 81.03 |
| 2013 | 106 | 8.98 |
| 2014 | 88 | 29.89 |
| 2015 | 86 | -5.03 |
| 2018 | 91 | 5.91 |
| 2019 | 110 | 14.38 |
| 2020 | 111 | 15.75 |
| 2022 | 106 | 4.44 |
| 2024 | 108 | 8.17 |
Data Analysis:
Table-1: Correlation Matrix: Avg Annual Rainfall and Sensex Growth Rate
| Average Rainfall | Sensex Return % | |
| Average Rainfall | 1 | |
| Sensex Return % | -0.49873 | 1 |
Table-2: Regression Matrix: Avg Annual Rainfall on Sensex Growth Rate
| SUMMARY OUTPUT | |||||||||
| Regression Statistics | |||||||||
| Multiple R | 0.498726 | ||||||||
| R Square | 0.248727 | ||||||||
| Adjusted R Square | 0.154818 | ||||||||
| Standard Error | 22.08491 | ||||||||
| Observations | 10 | ||||||||
| ANOVA | |||||||||
| Df | SS | MS | F | Significance F | |||||
| Regression | 1 | 1291.835 | 1291.835 | 2.648595 | 0.142292 | ||||
| Residual | 8 | 3901.948 | 487.7434 | ||||||
| Total | 9 | 5193.782 | |||||||
| Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | Lower 95.0% | Upper 95.0% | ||
| Intercept | 112.7544 | 58.84742 | 1.916047 | 0.091673 | -22.948 | 248.4568 | -22.948 | 248.4568 | |
| Average Rainfall | -0.97935 | 0.601767 | -1.62745 | 0.142292 | -2.36702 | 0.408331 | -2.36702 | 0.408331 |
Research Findings:
- Correlation Coefficient negative value (-0.49873) indicates that There is no Relationship between Average Annual Rainfall and Sensex Growth Rate annually in India. That means Other Factors are the Reason for Sensex Growth Rate.
- Further in Regression Result which finds the Impact of Avg. Rainfall on Sensex Growth, p-value > 0.05, indicating that there is no Impact of Average rainfall on Sensex Growth Rate annually.
- Next, Chi-Square Result for these two Variables resulted into ZERO Value; indicating there is no Association between Average Annual Rainfall and Sensex Growth Rate.
- All three tests, correlation, regression, Chi-square resulted into no relationship between Average Rainfall and Sensex Growth in India (data considered is in Figure-1).
- Mostly Investor Sentiments, Global Market Fluctuations, Political Stability, Investments, GDP growth, Industrial Productivity Index, Startups, Venture capital funding, etc could be Contributing to Sensex Growth Rate.
Hope this is Interesting.
Thank You,
Dr.Goparaju Purna Sudhakar
(https://gpsudhakar.com)
References:
- Mampatta, S.P. (2025), “Market Returns Rarely Move in Lock Step with Monsoon Rain”, Business Standard, May 28, 2025.