Markets record 2nd straight monthly gain in April; Sensex jumps nearly 4 pc

Economic Times

01-05-2025

The BSE Sensex jumped nearly 4 per cent last month showing resilience amid recent geopolitical concerns, as return of foreign investors to the domestic market, prediction of an above-normal rainfall in the upcoming southwest monsoon and optimism surrounding a potential India-US trade deal boosted sentiment. Moreover, easing valuations of stocks after correction in the market in the past few months also revived the buying activity, experts said.
ADVERTISEMENT The 30-share BSE benchmark gauge Sensex jumped 2,827.32 points or 3.65 per cent last month, while the NSE Nifty surged 814.85 points or 3.46 per cent.
In entire April, investors' wealth rallied by Rs 10.37 lakh crore to Rs 4,23,24,763.25 crore (USD 4.98 trillion).
This is the second straight monthly gain for the market benchmarks. In March, the Sensex surged 4,216.82 points or 5.76 per cent, and the Nifty climbed 1,394.65 points or 6.30 per cent. Markets performed well last month, driven by reduced tariff risks, a potential US-India trade deal, and strong FII (Foreign Institutional Investors) inflows, an expert said.
"The Indian stock market's resilience and sharp rally in April, despite global concerns and tensions with Pakistan, could be attributed to several supporting factors. The market correction over the past few months helped ease valuations, previously a key concern for investors, thereby reviving buying activity.
ADVERTISEMENT "Additionally, the announcement of temporary pause on tariffs by the US along with possible trade negotiations with countries also led to the relief rally. Also, after a prolonged selling by foreign investors, it is being seen that FIIs have turned net buyers of Indian equities in April," Puneet Singhania, Director at Master Trust Group, said.
Finally, the Reserve Bank's 25 basis point rate cut on April 9 lowering the repo rate to 6 per cent and its shift in policy stance from "neutral" to "accommodative" bolstered the market sentiment, Singhania said.
ADVERTISEMENT On April 9, the Reserve Bank of India (RBI) cut interest rates for a second consecutive time.
The Monetary Policy Committee (MPC), consisting of three central bank members and an equal number of external members, voted unanimously to cut the repurchase or repo rate by 25 basis points to 6 per cent.
ADVERTISEMENT RBI changed its policy stance to "accommodative" from "neutral". "The surprising resilience of the market is significant. After the reciprocal tariff tantrums and the heightened tensions between India and Pakistan, Nifty is up in April. This underscores the importance of not panicking during a crisis," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
ADVERTISEMENT The US announced sweeping reciprocal tariffs on several countries, including India, on April 2. Later, a 90-day suspension of these tariffs until July 9 this year, except for those on China and Hong Kong, was announced. However, the 10 per cent baseline tariff imposed on the countries on April 2 remains in effect, besides the 25 per cent duties on steel, aluminium, and auto components.
"The sustainability of the existing market rally in May will largely be determined by ongoing Q4 earnings by firms. Given the influence of the US equity markets globally, investors will also keep an eye on the US market developments as it could have a material effect on emerging markets like India," Singhania noted.
Further, market participants would keep an eye on the Indian government's stance regarding Pakistan as they could lead to volatility in the market, he said.
In the past one week, markets have faced volatile trends.
"Momentum is being capped by rising tensions between India and Pakistan and muted Q4 results. This negative bias is expected to persist in the near term, but the long-term outlook remains positive due to the minimal financial impact from the conflict," Vinod Nair, Head of Research, Geojit Investments Limited, said.