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Market Highlights April, 2026 |
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| Dear Investor, |
| India equity indices ended FY 2025-26 with their worst performance since the Covid hit FY 20, amidst escalating West Asia geopolitical conflicts, rising crude oil prices above $115/barrel, weaker rupee and persistent Foreign Institutional Investor (FII) selling. Indian markets had their worst month in March 2026 as benchmark Nifty fell 11.36%, the steepest decline since March 2020. There have been only 13 instances since 1995, when monthly returns declined by 10% or more. |
| During the financial year ended March 31, the Nifty and Sensex were down 5% and 7% respectively. While the Nifty Midcap 150 was up 1.60%, its small cap and micro-cap counterparts were down 5.4% and 8.70% respectively. The Indian stock market was the only emerging market (EM) that declined in the FY26. |
| FPIs were sellers to the tune of Rs.1.60 lakh crore during the year, making it the highest annual outflow numbers. On the other hand, DIIs invested Rs.8.49 lakh crore into the stock market, which was their largest yearly investment ever. |
| Looking at how Indian stock markets have performed over the last 18 months or so, the question on every equity investor’s mind is what to expect in FY27. While a ceasefire in the near term could trigger a broad-based recovery in the stock market, the crucial factors for a sustained rally would be lower crude prices, stronger corporate earnings as well as FPI inflows. Needless to say, if the current geo-political scenario in the Middle East continues for a month or so, we could see a round of downgrades to Nifty earnings estimates. |
| On the valuations front, Nifty 50 is trading below its 5-year and 10-year average one-year forward earnings. With nearly 950 stocks at 52 weeks low, strong macro fundamentals, policy stability and strong domestic inflows, there are opportunities for measured and systematic participation in the stock market for investors looking to deploy funds for longer term through mutual funds. Of course, the key would be to invest in a combination of fund categories such as multi-cap funds, large & midcap, midcap and small cap funds. |
| Warm regards, |
| Hemant Rustagi |
Market Highlights
Indian equities delivered a second consecutive month of gains in July, with the Nifty 50 closing at 24,384 (+2.17%) and the Sensex at 78,095 (+2.11%) — their first back-to-back monthly rise this calendar year. Our benchmarks outperformed Asian peers such as Japan, South Korea and Taiwan, as well as the S&P 500 and Nasdaq.
IT staged a remarkable comeback, with the Nifty IT index surging nearly 17% – its best month since 2020 – as a global sell-off in AI-linked stocks prompted foreign capital to rotate into Indian software services. A sharp escalation in the US-Iran conflict pushed Brent crude up roughly 18-20% during the month, injecting volatility into global markets and posing a key risk to both inflation and the rupee going forward.
After four straight months of selling, FIIs turned net buyers of Indian equities in July, pumping in ₹ 20,200 crore, aided by attractive valuations, improving corporate earnings and easing global headwinds. The stability of the rupee and fair valuations of India’s large-cap stocks are other factors facilitating renewed FPI inflows into the country. Despite the turnaround in July, foreign investors have pulled out a net ₹ 2.54 trillion from Indian equities so far in 2026, way more than the ₹ 1.66 trillion withdrawn during the whole of 2025.
We expect Indian equities to do well as healthy domestic macros, and a strong Q1FY27 earnings season continue to support investor confidence. While the ongoing Q1FY27 earnings season is expected to continue driving stock-specific action, investors will closely monitor RBI’s monetary policy decision, India’s Manufacturing and Services Purchasing Managers’ Index (PMI) data, along with developments in crude oil prices and geopolitical tensions in West Asia.
Gross GST collections rose 15.4% YoY to ₹ 2.11 lakh crore in July — the fastest pace in 14 months — aided by a 28.8% jump in import-related revenue. Cumulative April–July collections stand at ₹ 8.43 lakh crore, up 10.1% YoY.
Retail (CPI) inflation rose to an 18-month high of 4.38% in June, and early estimates put July inflation near 4.5–4.6%, driven by rising food and fuel prices. With inflation trending up, most economists expect the RBI to hold rates again at its August MPC meeting, though the tone may turn more cautious if price pressures persist.
Happy Investing!!