The financial rollercoaster ride continued in the Indian
share market. Is it time to be careful? In the first month of this new
financial year, the stock market index, Nifty increased by 1000 points within
just 15 days. It hit an all-time high of 22,775 on April 10 but then dropped
below 21,800 in less than two weeks.
However, it bounced back by 1000 points in the following two
weeks. The market got rattled by geopolitical tensions and U.S. market weakness
triggered by higher-than-expected inflation. This reduced hopes of a rate cut
and led to a global rise in bond yields, which hurt equity markets.
As the weeks went by, tensions in the Middle East eased, and
better-than-expected earnings from U.S. tech giants boosted confidence in the
stock market. By the end of the month, the market once again hit its all-time
high. This surge was driven by optimism about corporate earnings, especially in
banking.
April has historically been a good month for the stock
market, and this year was no exception. The Sensex has typically gained around
2.09 percent in April, since 1979 ,but this year it was 1.24 percent. Most
equity indices ended the month in the green.
Market
Performance in April 2024:
The BSE Sensex increased by 0.7 percent by April 30, while
BSE 100 went up by 1.48 percent. The mid-cap and small-cap segments performed
even better, with returns of 5.9 percent and 8.73 percent, respectively.
Sectoral
Movements:
Nifty Metal was the best-performing sector in April, gaining
12.25 percent, while Nifty IT was the worst, dropping by 3.78 percent.
Company
Performance:
Metal and defense-related stocks did well in April. Vedanta
was the top performer among large-cap companies, gaining 49.57 percent, while
HCL Technologies was the worst, losing 10.12 percent. Among mid-cap companies,
Aegis Logistics saw a significant increase of 56.53 percent.
Small-cap stocks, after a month's break, regained momentum.
FIIs
and DIIs:
Foreign Institutional Investors (FIIs) were net sellers in
April, selling equity shares worth Rs 36,764.12 crore. Domestic Institutional
Investors (DIIs), on the other hand, were bullish, adding Rs 42,757 crore to
the Indian equity market, one of the highest figures in recent times.
Over the past three months, DIIs have infused over Rs 1 lakh
crore into the Indian equity market pushing the FIIs on the backfoot.
Many companies will release their quarterly results for the
quarter ending in March, which will influence sectoral performance. Sectors
like Infrastructure and Pharma, which have shown resilience, may continue to do
well.
Until the election results are out, expect market volatility.
India vix is also rising as the major event is knocking at the door. It's
advisable to be cautious, as short-term fluctuations are likely. While there
may be opportunities from company-specific earnings, it's essential to keep an
eye on the broader global and political landscape.
In summary, May will be a month to trade carefully. While
there may be chances to capitalize on individual stock performances,
uncertainty from elections and global events will create a volatile trading
environment. Diversification and a long-term perspective remain key for
navigating these uncertain times.
Disclaimer: The information provided on MoneyWiseMind is for educational and informational purposes only. It is not intended to be financial advice, and you should not rely on it as such. Before making any financial decisions, you should consult a licensed financial advisor.
