Stock markets post biggest monthly jump in two years

Sensex rises 6.7%, with IT and FMCG stocks leading the rally

Defying spiralling crude oil prices and weakness in the rupee, the benchmark stock indices ended April with a gain of nearly 7 per cent, their best monthly performance since March 2016. In the preceding two months, the market had fallen a little over 10 per cent amid a jump in US bond yields, flaring of global trade tensions, and domestic worries.

Defying spiraling crude oil prices and weakness in the rupee, the benchmark stock indices ended April with a gain of nearly seven per cent, their best monthly performance since March 2016.

In the preceding two months, the market had fallen a little over 10 per cent amid a jump in US bond yields, flaring of global trade tensions and domestic worries such as the banking fraud and increase in political uncertainty ahead of the 2019 general election.

The rebound has come on the back of a favourable monsoon outlook, gains in information technology (IT) stocks — the second biggest sectoral weight in the benchmark indices, after banking — and improvement in the earnings outlook. More important, investor sentiment was also buoyed by positive global cues, thanks to cooling of geopolitical tensions and optimism that monetary conditions will continue to remain favourable, despite the US Federal Reserve moving along the path of interest rate tightening.

On the BSE, the benchmark Sensex gained nearly 0.6 per cent on Monday, ending the month with a 6.7 per cent gain. The latest gains were led by Housing Development Finance Corporation, which posted strong numbers. Followed by Tata Consultancy Services, whose shares have been making new highs after it posted encouraging results on April 21. The country’s highest valued company ended the month with a sharp 24 per cent gain. YES Bank and Mahindra & Mahindra were other major Sensex gainers, adding 18 per cent each.

Only three Sensex stocks — State Bank of India (SBI), Wipro and Maruti Suzuki — ended the month with negative returns. While Wipro and Maruti Suzuki missed on earnings expectations, negative sentiment towards public sector banks continued to

weigh on SBI. Among the BSE sectoral gauges, the IT, fast moving consumer goods and realty indices gained the most during the month. While the telecom, oil & gas and public sector undertaking indices ended with losses. Markets will remain closed tomorrow on account of May Day.