7 mins read . 03 May 2023
April 2023 began on a positive note. RBI, in its April 2023 policy meeting, opted to maintain the status quo on repo rates at 6.5%. This was contrary to the popular perception that the RBI would go ahead and hike rates by another 25 bps. The signal was that, while the interest rates in India may not have peaked, it was certainly close to the peak. In response, the foreign portfolio investors infused funds into India with a vengeance. April 2023 was a truncated month with just 17 trading sessions. Still, the FPIs managed to infuse a healthy $1.41 billion into Indian equities in this period. Obviously, that led to a smart rally in the stock markets and the rally was spread out across small caps, large caps, and mid-caps. In fact, the Nifty even recouped the psychological 18,000 levels by the close of April 2023.
The rally was across the board with buying seen across small-cap, mid-cap, and large-cap companies. Also, the interesting aspect is that the FPIs remained net buyers on majority of the days and the buying was spread through the month rather than in a handful of block deals. Here is the table of returns on key indices in April 2023.
|Sector / Index||April 2023 Returns (%)|
|Nifty 50 Index||+4.06%|
|Mid Cap Index||+5.86%|
|Small Cap Index||+7.54%|
We will look at the sectoral movers in a more granular fashion in the ensuing section, but what is of note here is that the rally from lower levels was quite sharp during the month. In March, the FPI flows were still driven by the GQG infusion into Adani group. There were no such special privileges in April and the infusion was more secular in nature.
Here we look at the five best performing themes and the five bottom performing themes for the month of April 2023.
|Sectoral / |
|Current Index Value||1-Year |
|NIFTY PSU BANK||4,167.65||48.56||13.18|
|NIFTY PRIVATE BANK||21,885.75||18.43||8.19|
|NIFTY INDIA DIGITAL||5,247.95||-12.62||4.17|
|NIFTY CONSUMER DURABLES||24,276.35||-12.50||1.65|
Data Source: NSE
If you look at the gainers, the obvious theme appears to be the rate sensitives, especially in the aftermath of the RBI going slow on rate hikes. Here are some key takeaways.
While the RBI decision to hold rates has surely come as a boost to markets, there are still some domestic and global concerns for investors. These headwinds cannot be ignored.
In a sense, the markets have opted to look at the positive side of domestic challenges and have also chosen to ignore the global headwinds. Here are some of the headwinds that could really matter in the coming days.
April 2023 was a robust month where the markets have chosen to ignore most of the headwinds. Probably, the markets may not be so charitable in the coming months.
Content source: NSE and NSDL