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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 May, 2026
The month of April turned out to be strong for equity markets, with BSE Sensex gaining around 6.90%. The BSE midcap and small cap indices were up 9.15% and 8.35% respectively. However, FIIs selling remained a key overhang for the market, with outflows totalling to over ₹70000 crore during the month. Investor sentiment will also be influenced by the domestic political developments, as the state election results next week could add to the volatility.
On the global front, the sentiment deteriorated sharply as US–Iran tensions escalated and major maritime shipping routes faced continued disruption. Brent crude crossed the $126 per barrel mark for the first time in four years, intensifying inflation concerns and pressuring global risk assets. The Fed kept rates unchanged but maintained a firm policy stance, supporting the dollar and tightening conditions for emerging markets.
Early results trend for the March 26 quarter showed that net profit of India Inc grew 14% year-on-year. This is based on Q4 results announced by around 159 companies. India Inc has managed costs effectively despite pockets of inflationary pressure. The IT sector also contributed to the positive earnings trend, reporting a 12.9% year-on-year increase in net profit. This growth was partly attributed to a weaker rupee against major currencies, which boosted rupee-denominated profits.
In an expected move, the Monetary Policy Committee (MPC) unanimously decided to keep the policy repo rate unchanged at 5.25% and retained the ‘neutral’ policy stance. The committee noted that the ongoing conflict in West Asia poses unprecedented uncertainty for the global economy and is likely to be a drag on domestic production in FY27 as supply chain gets disrupted. However, the committee also noted that India’s macro fundamentals are on a much stronger footing than previous crisis episodes and therefore it is in a much better position to withstand shocks.
Going ahead in May 2026, the stock markets are likely to remain sensitive to the developments in the West Asia conflict, surging crude oil prices, weakening rupee and foreign fund outflows.