- India's benchmark stock indices are set for the best April since 2009.
- However, over half of those gains came in the last week of trading, and a big chunk of it Thursday, April 30.
- At least three out of the top ten weekly gainers, IndusInd Bank, HDFC, and ICICI Bank, were buoyed by hopes that loan defaults in India won't be as bad as previously expected.
- Follow the latest news and highlights on businessinsider.in.
American drug maker Gilead’s success in a clinical trial has given the world hope of finding a cure for COVID-19 coronavirus pandemic. That led to an over- 1,000 point rally in the Sensex on Thursday (April 30) morning, in sync with the optimism around the globe.
The Indian benchmark indices, Sensex and Nifty, have gone up 14% since April 3, but more than half of those gains came in the last week of trading — at a time when Moody’s slashed India’s growth forecast for calendar year 2020 to 0.2%, from 2.5% it had projected in March, layoffs continue, earnings from a top lender (Axis Bank) disappointed, and some of the world’s most influential billionaires lost their patience with the economic shutdown.
Though they had no impact on the market, two of India's most-talented Bollywood stars, Irrfan Khan and Rishi Kapoor, passed away making the general mood a lot worse.
While the bigger picture looked bleak, there were quiet celebrations happening in different pockets of the Indian share market. At least two out of the top ten weekly gainers, IndusInd Bank and HDFC, were buoyed by hopes that loan defaults in India won't be as bad as previously expected.
Here’s a look at the top 10 gainers among the blue-chip stocks this week ending April 30:
| Stock | Gains this week | Trigger |
| Tata Motors | 23.93% | Jaguar Land Rover has restored three-fourths of its budgeted production in China |
| ONGC | 20.34% | Raised ₹1,000 crore via commercial papers at a cheap rate of 4.13% per annum. This showed debt market’s strong interest in India’s largest explorer despite an oil crash that has hammered its cash flows, the Economic Times reported. |
| UPL | 19.76% | The agrochemical maker said that the business is less affected by COVID crisis because farming continues with push from governments to ensure adequate food supply during lockdown. The company also repaid 30% of its debt in the last 3 months. |
| Hindalco | 17.21% | The Aleris acquisition turned out to be better than expected. Hindalco decided to pay an additoinal $50 million due to the better than expected performance revealed in the latest results. |
| Hero Motocorp | 17.05% | The stock has been on an uptrend since mid April due to a host of reasons including hopes that COVID fears may push people to avoid public transport in the near future but not everyone may be able to afford a car |
| GAIL India | 15.74% | At the start of the week, the stock was down 50% in the last one year and nearly 20 'Buy' recommendations. |
| Vedanta | 15.21% | The rally in Vedanta was part of a larger change in sentiment in favour of metal stocks hoping for a reduction in competition from China. |
| HDFC | 14.96% | The IndusInd Bank experience eases fear of defaults by borrowers of India's largest mortgage lender. |
| HCL Tech | 14.58% | Nomura gave a 'Buy' call on the stock on April 20 with a target price 25% higher. The stock has rallied since and is just ₹25 short of the target. |
| IndusInd Bank | 13.82% | Earnings surprise as borrowers continue to repay loan instalments |
The money did not come from the foreign investors. They continued to be net sellers in the cash market for the fourth straight month. It was domestic institutional investors like mutual funds that bought the most in this rally.
“Markets this week rallied from the lows seen in March 2020. After almost a month of lockdown the world over, early signs of easing of the same along with some signs of the flattening of the COVID -19 curve spurred hope of economic activity resuming albeit at a slow pace. Some promise of a possible cure with positive preliminary results of a few drugs also added to hope and optimism," Shibani Sircar Kurian, Executive Vice President, Fund Manager & Head- Equity Research,Kotak Mahindra Asset Management Company said.
So, what does the road ahead look like? “The Fear Of Missing Out will drive many investors – including myself – off the sidelines," said Nigel Green, founder and chief executive of deVere Group, a global financial advisory firm. “Investor exuberance is contagious. As the markets move steadily higher - unfazed by the recent poor economic data from the peak of the pandemic – it can be expected that the uptick will further sharpen due to that powerful investor sentiment: FOMO," he added.
If FOMO drives some of the global investors back to India, the rally may spillover into May. However, investors must also remember that the month of May is usually one where stocks underperform, leading to the widely-known adage "sell in may and go away." Will May 2020 break the trend?
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