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There is a popular stock market adage — Sell in May and Go Away — suggesting investors sell stocks in May and re-enter in September to avoid historically weaker market performance during the summer.
While cited often, analysis shows that this saying often doesn't hold, at least not for the Indian stock market, as May has historically been a positive month for Dalal Street.
Data from Trendlyne shows that the Nifty 50 index has risen in six of the last 10 years during May. But this time, the index might break away from the trend as the ongoing US-Iran war, which has entered its third month, remains a key overhang.
Oil prices have increased sharply due to the disruption to the Strait of Hormuz, a critical chokepoint accounting for 20% of the world's energy needs, which has implications for India’s macros.
Brent crude futures for July were 0.8% at $111.29, and West Texas Intermediate futures rose 0.4% to $105.44 on 1 May, positioning for a weekly rise of 6% and 12%, respectively.
For India, crude is the “joker in the pack,” said Kranthi Bathini of Wealthmills Securities. If crude prices keep rising, it can jeopardise India’s growth story in the short to medium term, he cautioned.
However, analysts do not believe the investors must "Sell in May" and not look back.
“The US-Iran conflict and elevated crude prices have clearly raised India’s macro risk, because expensive oil can hurt the rupee, inflation expectations, fiscal balances and margins in several sectors. This is also not a market where investors should exit quality equities in panic,” said Harshal Dasani, Business Head at INVasset PMS.
Volatility will likely remain a key feature of the market amid mixed signals around the US-Iran war, according to experts, while a decisive end can spark a sharp rally. Exiting the market now will prevent investors from capitalising on any such moves.
"If crude stays elevated for longer, the upside in indices may remain capped, and sectors dependent on imported raw materials could see pressure. However, a meaningful de-escalation in West Asia can trigger a sharp relief rally, as positioning has already turned cautious," Dasani said.
Even though the broader outlook is not bearish, investors should expect a wider trading range instead of a one-way rally, according to him.
Bathini also echoed similar views, suggesting that this is a “buy on dips, sell on rallies” kind of market. "One needs to closely track global developments and stay nimble with their positions in the short to medium term."
Apart from the geopolitical factors, some near-term positive trend is likely next week, particularly if the BJP's projected breakthrough in West Bengal is validated on 4 May 2026.
However, Kotak Institutional Equities (KIE) thinks the durability of any rally will be tested quickly, as the trajectory of crude oil remains the single largest short-term risk variable.
"We expect markets to trade in a range, with election enthusiasm fading relatively quickly as attention reverts to (1) earnings delivery, (2) oil price trajectory and its implications for India’s macro and (3) the government's willingness to undertake difficult but necessary policy adjustments on energy pricing," it added.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Saloni Goel has over nine years of experience as a business journalist, with a strong track record of covering the financial markets. Over the course of her career, she has reported extensively on global and domestic equities, IPO market activity, commodities, and broader macroeconomic trends. Her reporting reflects a keen eye for detail, data-driven analysis, and the ability to spot emerging themes early.<br> At Mint, Saloni has been part of the markets team for nearly two years, where she currently works as Chief Content Producer. In this role, she plays a key part in shaping market coverage, driving editorial strategy, and ensuring timely, accurate, and insightful reporting across. She has been closely involved in breaking news coverage and in crafting stories that help decode the complex financial developments.<br> Before joining Mint, Saloni worked with some of India’s leading business newsrooms, including The Economic Times and Business Standard. Throughout her career, she has worn multiple hats—ranging from reporting and editing to contributing in-depth features and identifying new storytelling formats and market trends.<br> Her experience in fast-paced digital newsrooms has given her an edge in simplifying complex market concepts without losing analytical depth. Outside of work, Saloni enjoys reading books and spending time with her pet.
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