Marching on in April

Stock Markets

Sensex surged 4% in the last week of April with 4 days of continuous increase despite turbulent times with Covid cases increasing significantly in India.  Surge is mainly due to better Q4 results of corporate (compared to 2020 Q4)

• IT & ITES stocks - Revenue growth of TCS 4.2%, Infosys 13.08%, Wipro 3.14%, Mindtree 5.2%  
• Bank stocks - Revenue growth of HDFC 13%, ICICI 17%, Axis Bank 10.98%  
• Automobile - Revenue growth of Maruti Suzuki 32%, TVS Motor 52.87%
• FMCG - Revenue growth of Britannia 9.68%, HUL 35%, Hatsun 23.89%  
• Manufacturing - Revenue growth of ACC 22.57%, Bajaj consumer 39.25%, Tata Steel 53.4%, ABB 7.02%, Biocon 16.3%, Carborandum 27.38%, Ambuja Cements 23.44%  

Overall corporate's are delivering better than expected results for Q4 2020-21 which keeps investors interested.   

Another major reason for the surge in sensex is that business sentiment is upbeat as can be seen by RBI survey  

        Source : RBI

Reserve Bank of India (RBI) Industrial outlook survey of the Manufacturing Sector for Q4 2020-21 was released on 7th April 2021, this shows a positive sentiment for Q4 2020-21 and Q1 2021-22.  Markets are factoring in this positive sentiment and gives a big thumbs up and consequently jump in sensex.    

As for Covid markets have already factored the same in 2020 and so more cases will not impact it unless it takes on monstrous proportion which I believe will never happen.  Though cases are on record levels good news is that till now 15 crore vaccination have been administered in India and there is a conscious push for faster vaccination in the days to come.  Government has realised vaccination is the only route out of this pandemic and stepping up all efforts which is appreciated.   

Rupee

Rupee in the last 4 days had an appreciating effect and appreciated 1.28% moving from 75.02 on 23.4.21 to 74.06 on 29.4.21, this primarily is due to a positive stock market which grew by 4% during the same time period.  Also the announcement that US Fed Reserve keeps its policy rates and assets purchases unchanged is pulling the dollar index down and it is at its one month low and currently at 90.63, this helps the Rupee to appreciate. 

US Dollar Index (DXY)

Goo

OIL

Good news is that petrol / diesel prices in India are unchanged since 15th April, which is a long record considering price movements in the last 1 year.  Primary reason for this is a slight drop in demand due to Covid & oil companies are in pause mode to see the trends in global oil market.  In the meantime there has been a sharp movement of oil and Crude WTI is trading at $64.98 per barrel