April started positively for domestic equities, however after the first two weeks – equities fell and wiped out all gains. Nifty 50 closed down 2%.
Broad Market Indices: Mid-caps (+0.6%) and Small caps (+0.6%) outperformed Nifty 50. Nifty Next 50 (+3.5%) outperformed.
At sectoral level, performance was mixed and the deviation between sectors has been very large.
Power (+18%) best performing sector with significant outperformance.
After few months of underperformance, Autos (4.8%) and FMCG (5.6%) were amongst the better performers.
IT (-12.1%) was the worst performing sector for April and preceding 3 months.
Pharma was almost flat, and has been worst performer in the last 1 year now with significant underperformance.
Within Commodities: Oil & Gas and Power continue to outperform, Metals underperformed after many months of continued outperformance.
Global equities were very weak (on average down -5%). Reports suggest that globally, value stocks continue to outperform growth stocks.
Emerging markets underperformed developed markets as risk aversion picked up due to FED’s hawkish commentary, strengthening USD, impact of Covid lockdowns in China and ongoing Russia Ukraine war.
Within developed markets, European markets and agri commodity exporters Australia and New Zealand outperformed.
US: Due to fears of aggressive FED rate hikes and its consequences, US equities have been amongst the worst performing market. Nasdaq (which comprises of ~50% in high growth technology companies) has been the worst performer down about 13% in the month.
UK: Amongst the very few positive markets – led by outperformance in defensive sectors (Pharma & consumer staples).
China: Continues to deliver negative returns as Covid lockdowns continuing impacting growth projections. Taiwan, Hong Kong also continue to underperformed.
India: FII outflows moderated and equities outperformed.
The trend of last 2 months intensified further as most currencies weakened significantly versus the USD highlighting significant risk aversion globally.
Russian Ruble: Has continued its solid rebound versus USD as they implemented mandatory conversion of foreign currency to ruble by export-focused companies.