The Month that was: April 2026

Indian equity markets ended the month on a strong positive note on the hopes of de-escalation in the West Asia conflict, recovering from the sharp sell-off in the previous month. The benchmark Nifty index surged by 7.5%. Broader markets outperformed the large-cap index, with mid-cap and small-cap indices climbing by 14% and 18%, respectively. As far as sectoral performance is concerned, all indices ended in the green, with Power, Realty, and Capital Goods emerging as the standout performers. Globally, most markets witnessed uptrend with heavy gains seen in Asian markets like South Korea, Taiwan, and Japan.

Investor sentiment remained resilient despite ongoing global uncertainty stemming from the US-Iran conflict, a depreciating rupee, and rising crude oil prices. Key macroeconomic developments included FY2027 GDP growth revisions for India, with the IMF and World Bank raising forecasts to 6.5% and 6.6%, respectively, while Moody's lowering its projection to 6%. Central banks maintained the status quo, as both the RBI and the US Federal Reserve kept their benchmark interest rates unchanged. On the domestic economic front, retail (CPI) and wholesale (WPI) inflation rose marginally, while industrial production (IIP) growth slipped. Other notable events included the IMD projecting a below-normal monsoon and early corporate earnings coming in largely in line with expectations. On the flows front, Foreign Portfolio Investors (FPIs) sold US$ 4.4 billion during April while Domestic Institutional Investors (DIIs) provided robust support by buying US$ 5.1 billion during the month.

Market Outlook: Looking ahead, Indian equity markets will likely continue to balance strong domestic momentum against external headwinds such as geopolitical tensions, rising crude oil prices, and currency fluctuations. The trajectory of domestic inflation and the potential impact of a below-normal monsoon will be key factors to monitor in the near term. An elongated conflict in West Asia remains a key risk for the markets going ahead. However, steady corporate earnings, inexpensive valuations and persistent support from domestic institutional investors provide a solid foundation for equity markets. These structural positives position the market well to navigate near-term macro volatility and sustain its recovery momentum over the medium term.

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