The Indian stock market ended lower in the final trading session of April, with the Nifty 50 declining 0.73% to close at 24,000 and the S&P BSE Sensex falling 0.78% to 76,891. According to reports from Live Mint, both indices recovered a major portion of their intraday losses from the day's low, though they faced significant pressure throughout the session. Despite the daily decline, both benchmark indices recorded solid monthly gains of over 7%, marking their biggest monthly advance since December 2023. As per The Economic Times, the sharp drop erased nearly ₹5 lakh crore from the total market capitalisation of all companies listed on BSE, pulling it down to ₹464 lakh crore. The Sensex crashed over 1,200 points and Nifty fell below 23,800 briefly during morning trading before recovering some losses by afternoon.
The broader market segments significantly outperformed the headline indices during April. As reported by Live Mint, the Nifty Midcap 100 index jumped 13% while the Nifty Smallcap 100 index surged 18% for the month. This outperformance indicates strong investor interest in mid and small-cap stocks despite the overall market volatility, suggesting selective stock picking amid the challenging environment. According to The Economic Times, the Nifty Smallcap 100 index declined 0.5% while the Nifty Midcap 100 index tumbled nearly 1%, with around 1,976 stocks declining on NSE, while 1,295 advanced and 98 remained unchanged. The India VIX, which measures volatility in the market, jumped around 6% to 18.46 during the session.
The Indian rupee faced significant pressure, declining to a fresh record low of 95.07 against the U.S. dollar on Thursday before paring some losses to close at 94.9050. According to The Economic Times, the rupee declined as much as 0.5% during the day and breached its previous all-time low of 95.21 touched in late March. Crude oil prices continued their upward trajectory, with Brent crude futures rising around 4% to $123 per barrel in Thursday morning trade after crossing $120 per barrel for the first time since Russia's invasion of Ukraine in 2022. The rupee has depreciated approximately 9% over the past year and sits at record lows, with FPI outflows exceeding $18.8 billion in recent months reflecting foreign investor concerns about currency weakness. As per The Economic Times, Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, warned that sustained FII outflows and elevated crude prices are pressuring the currency.
Major global brokerages have turned cautious on India, with HSBC downgrading Indian equities to underweight on April 23, 2026, marking its second downgrade this month. JPMorgan cut its rating from overweight to neutral, lowered its Nifty 50 base case target for 2026 to 27,000 and outlined a bear case scenario of 20,500. Bernstein, in a separate open letter to the Prime Minister, flagged structural risks that go beyond near-term valuation concerns. UBS, Nomura, Citi and Goldman Sachs had already turned cautious earlier in March, with every major global brokerage moving in the same direction within weeks of each other. The immediate triggers include elevated valuations with Sensex and Nifty trading at approximately 18.5 times one-year forward earnings below their long-term averages of 19.8 times and 19 times respectively, while BSE MidCap 150 at 26.84 times and BSE SmallCap 250 at 24.14 times are still significantly above historical averages.
A key concern raised by Bernstein and JPMorgan is the absence of AI-related investment opportunities in India's listed market. Global capital is currently chasing AI infrastructure plays, with US markets having Nvidia, Microsoft, Alphabet and Meta, while China has its own technology ecosystem. India does not yet have a listed company that represents a credible pure play on the AI economy at scale. India's IT workforce of 15 million faces genuine disruption from AI, as the sector has been one of India's most important engines of middle-class income creation and foreign exchange earnings. India's R&D spending at less than 1% of GDP compares unfavorably with South Korea at 5% and China at approximately 2.5%. The manufacturing sector at 15-16% of GDP remains far below where the economy needs it to be for job creation, with PLI schemes producing early positive signs but the scale of transformation required has not yet materialized.
