Nifty 50 Poised to End Four-Month Downtrend in April, Yet Sustained Rally Remains Uncertain

Indian Stock Market Stages Significant Recovery in April Amid Ongoing US-Iran Conflict

The Indian stock market has staged a significant recovery in April, snapping its four-month losing streak, with equity benchmarks Sensex and Nifty 50 up over 8% so far this month. The rebound has largely been driven by value buying after the sharp more than 11% decline in March. Despite elevated crude oil prices driven by persisting concerns over the stalled US-Iran talks and the rupee's weakness, the market appears to be discounting that the worst in terms of geopolitical conflict could be behind.

The NSE barometer jumped 1.40% during the session on Wednesday, 29 April, to hit an intraday high of 24,332. While hopes are high that the US and Iran will soon find a way to end their conflict, there is no clarity on when the two sides will sit down again for negotiations. US President Donald Trump is reportedly unhappy with the fresh proposals made by Iran as it does not include the West Asian country's nuclear programme.

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Note: The above table shows the quarterly performance of Sensex and Nifty 50. However, as per the original text, the exact figures are not provided.

Crude oil prices have been at an elevated level for about two months now, and the worst part is that they can stay at higher levels for a longer period. Shell CEO Wael Sawan said that the Strait of Hormuz blockade-led oil shortage is likely to drag on for months and possibly into 2027. India, which imports about 85-90% of its oil requirements, is certain to take a hit. Experts warn that inflation may rise while economic growth and corporate earnings may lose momentum.

Crude Oil Price Comparison

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Experts warn that the prolonged high crude oil prices will have a negative impact on India's growth and inflation. "Brent crude at $110 is negative for India. As long as crude price remains elevated, the downside risk to India's growth and the upside risk to inflation will remain high," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

The market's resilience is being tested by external headwinds, including the ongoing US-Iran conflict. Ajit Mishra, SVP of Research, underscored that the Nifty's move to snap its four-month losing streak signals underlying resilience, but the sustainability of gains will be tested by external headwinds. Elevated crude oil prices amid the US-Iran conflict pose risks to inflation and could delay monetary easing, thereby capping valuation expansion.

In the medium term, Mishra expects markets to remain range-bound with a slight positive bias, supported by domestic liquidity but weighed by a gradual earnings recovery. "The market is transitioning into a more selective phase, where domestic-focused sectors may outperform, while crude-impact sectors and IT could remain under pressure," said Mishra.

Market Outlook

The broader trend remains constructive, but the near-term strategy should be to adopt a 'buy on dips' approach rather than chasing rallies, until there is greater clarity on crude trajectory and global macro stability. The Nifty 50 can potentially move towards 25,000 and may even cross that level. However, for the rally to sustain beyond 25,000 and extend further, crude oil prices need to cool off to around $70–75 per barrel, said Shrikant Chouhan, the head of equity research at Kotak Securities.

The prospects of a poor monsoon loom over India, with Skymet predicting rainfall at 94% of the long-period average, while the India Meteorological Department (IMD) expects it at 92% of the 50-year average due to the El Niño effect. The risks are real and raise near-term uncertainty, said Namrata Mittal, CFA, Chief Economist at SBI Funds Management. However, it will more likely cause growth moderation and market dispersion than a sustained downturn in 2026.