May Pulse - Sage Views - Return of the Bulls
- Nikhil Gupta
- May 16
- 2 min read
Updated: Jul 29
One of the frustrating things for people who miss the first rally in a bull market is that they wait for the big correction, and it never comes. The market just keeps climbing and climbing - Martin Z
Dear Investor,
In our last newsletter, we mentioned a turning point for markets that we have seen in the last month and this month so far. Despite a volatile month, India’s equity market experienced sharp swings in April. Yet, by month-end, it emerged as one of the most resilient markets worldwide, maintaining its upward trajectory for the second straight month. India was Asia’s best-performing equity market during the month.
Indian equity market (Nifty-50) was up 3% MoM in April 25. Mid-Cap and small-cap indexes were also up 5% and 2% MoM in April 25. Sector-wise, Oil and Gas was the top gainer in April 25 with returns of 7% Month over Month, followed by Consumer Durables (6%), Healthcare (5%), and Real Estate (5%). Auto and Banks were the only laggards with -6% and -3% returns, respectively.
Market Outlook: Return of FII into Indian markets, a 90-day suspension on Trump’s reciprocal tariffs, and favourable domestic macros propelled Indian equities upward in April 2025. Support came from a surge in equities, ease in CPI, better composite PMI, IIP, cement/steel/electricity production, higher forex reserves, capital inflows, currency appreciation, port volume, railway freight, auto sales, lower oil prices and stable banking indicators. Operation Sindoor tested India’s defence capabilities, which turned out to be a net positive for all defence stocks. We are halfway through May and we have already seen another rally in all segments of the market. Markets do look overvalued at this point in time, however, we might see some more green shoots before it cools down.
Nifty 50 one year forward valuation is above its 10 year average.
What should investors do?
Investors should focus on their asset allocation and focus on their long term goals. Its best to not time the markets at this point and avoid participating in sectoral/thematic fund NFOs during this ongoing rally. Keep your portfolio simple and if required, get a portfolio review done.
You can also sign up on our app and get started with our all-in-one investing app. This will help you to make goal-based investments, and with our guidance, you will be able to maximize your returns.
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Happy Investing!
Warm Regards,
Nikhil Gupta