Despite being a washout month for the economy, Indian equities were the best performers globally in April. The Nifty
rose 14.7 per cent in local currency terms — most among major world markets.
In dollar terms, India’s returns were slightly below that of Taiwan. Some believe that the best monthly performance in 11 years was on a weak footing, as it was sans any fundamental base. If investor sentiment turns bearish, domestic markets
could tumble, they add.
Already, Indian markets
have kicked off May with sharp underperformance. Indices plunged six per cent on Monday. Many brokerages have cut their stance on the domestic market. Last month, Goldman Sachs downgraded its stance on the Indian market to ‘marketweight’ from ‘overweight’ citing “delayed recovery and extended valuations.” The brokerage has also lowered the Nifty
target to 9,600 for June 2021. Meanwhile, HSBC is a massive 410 basis points underweight on India vis-à-vis its weight in the FTSE EM index.