The Month That was : April 2024

In April, Nifty Index recorded a gain of 1.2%, rising for the third consecutive month. The mid-cap and small-cap indices rebounded from the March sell-off and were up 5.8% and 11.4% respectively. Sector wise, most of the sectoral indices closed in positive territory, except for IT, which declined by 4.3%. Metals, power, and realty were the top gainers, up 10.8%, 7.7%, and 7.5% respectively. 

On the global front, markets ended on a mixed note, with Hong Kong (+7%), Russia (+3%), and Malaysia (+3%) as major gainers, while the US Dow Jones (-5%), Japan (-5%), and Germany (-3%) declined the most. Key developments included the RBI MPC voting with a 5-1 majority to hold the repo rate at 6.5%; upward revisions of FY2025 India GDP growth forecasts by IMF, ADB, and World Bank; IMD forecasting an above-normal monsoon and Brent crude touching US$93/bbl amid geopolitical tensions in the Middle East. FPIs sold US$3 bn of Indian equities in the secondary market, while DIIs bought US$5.2 bn. On the economic front, industrial production in February increased to 5.7% from January's 4.1%. CPI inflation in March moderated to 4.9% from 5.1% in February.

Market Outlook 

The outlook for Indian markets remains positive, driven by strong domestic macro economic parameters, expectation of stable political outcome in upcoming General Election (counting of votes to be done on 4th June) and supportive global liquidity going ahead as interest rate hike cycle reverses during second half of 2024. However, intermittent volatility is not ruled out ahead of election results.

Thr government of India has allowed foreign portfolio investors (FPIs) registered at GIFT City in Gujarat to issue participatory notes (P-Notes) to their clients globally. Thill will help increase foreign investment into Indian equities. On going capex cycle and revival of domestic consumption will be key to Nifty50 companies posting earnings CAGR of nearly 15% over next 2 years. Sectors like Capital Goods, Banks, Consumer Durables, Real Estate and Energy are expected to do well going ahead. Investors are suggested to consider taking advantage of any intermediate correction in equity market to increase allocation in stocks with strong growth prospects over medium to long term.

Happy Investing!