Skepticism Runs High as Indian Stocks Stage Swift Rebound in April

Good morning...

I’m Ashutosh Joshi in Mumbai wrapping up a week that looks set to snap a long losing streak.

With one session to go before the end of the week, the Nifty’s 4.7% surge over four days has put it on course for the best weekly gain since early 2021. The rally has broken a six-week losing streak and yet, few in the market seem confident that it will sustain.

The skepticism isn’t without cause. Foreign funds continue to yank money out of local stocks — they were sellers even as the benchmark jumped almost 4% on Wednesday following the US-Iran ceasefire. Also, positioning data showed that short covering was a key driver of those gains. Meanwhile, there is a risk that the central bank’s currency curbs to support the rupee may push global investors away. Finally, as the results season gathers pace, Nuvama analysts see earnings staying weak — a persistent trend over the past seven quarters.

As for this morning, oil prices are up and Asian stocks are slightly higher ahead of US-Iran talks over the weekend. Tata Consultancy Services will be in the spotlight after cost curbs helped quarterly earnings beat estimates. Peer Wipro will also be in focus after announcing plans for a share buyback.

Will this weekend’s Pakistan-brokered peace talks between the US and Iran uphold a fragile ceasefire? Bloomberg reporters answer your questions in a Live Q&A on the next steps in de-escalating the conflict at 10 a.m. IST today.

In today’s newsletter, we look at why: