However, the past 10-year record reveals a bullish tilt in April, with Nifty ending in the green on 7 occasions supported by domestic institutional buying even as the foreign institutional investors’ (FIIs) record remains evenly split.
Nifty in April
Returns have ranged from a sharp 14.68% rally in 2020 to a modest 1-4% gain in most years, indicating a generally stable upward bias. However, there have been occasional dips, with declines of 0.41% in 2021 and 2.07% in 2022. Overall, April has tended to be a moderately positive month for the index, typically posting low-to-mid single-digit gains with sporadic volatility.
The index continues to trade below its key moving averages, while momentum indicators remain firmly in bearish territory, indicating that downside pressure persists, Sudeep Shah – Vice President & Head of Technical and Derivative Research Desk at SBI Securities said, pointing out to the recurring pattern of short-lived pullbacks of 2-3 sessions followed by sharp gap-down openings, since the onset of the war.
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With one more trading session to go in March, the month has seen massive sell-off resulting in a 9% decline in the Nifty index.
The option data for the March series indicates a strong CALL Open Interest (OI) at the 23,500-strike price, followed by 24,000, Axis Securities said in a note. In contrast, a substantial concentration of PUT OI is observed at 23,000, with additional levels at 22,500, suggesting the likely Nifty range for the current expiry between 22,500 and 23,500, the note said.
FII/DII trends
FIIs have shown a volatile trend in April over the past decade, alternating between strong inflows and sharp outflows. Notable buying was seen in 2019 (Rs 21,193 crore) and 2023 (Rs 11,631 crore), while selling pressure was significant in 2022 (Rs 17,144 crore), 2021 (Rs 9,659 crore) and 2024 (Rs 8,671 crore). The data reflects FIIs’ sensitivity to global cues, with phases of risk-on and risk-off driving sharp swings in flows.
DIIs, on the other hand, have largely acted as stabilisers, with consistent inflows in most years. Strong buying was recorded in 2024 (Rs 44,186 crore) and 2022 (Rs 30,843 crore), helping offset heavy FII outflows during those periods. Barring a couple of years like 2019 and 2020, DIIs have remained net buyers, underlining their growing role in supporting the market during periods of foreign investor volatility.
FIIs offloaded domestic equities worth Rs 1,13,810 crore in March, extending their selling trends amid the Iran-Israel war. So far, this year, they have offloaded Indian shares worth Rs 1,27,157 crore.
Commenting on the current trends, Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments said the weakness in global equity markets following the war in West Asia, the steady depreciation of the rupee, fears of decline in remittances from the Gulf region and concerns surrounding the impact of high crude price on India’s growth and corporate earnings contributed to the sustained selling by FPIs.
“It is important to understand that FPIs were sellers in other emerging markets, too, like Taiwan and South Korea. There is a risk-off trend in equity markets, globally after the war broke out in West Asia. The poor returns from India vis-a-vis other markets – both developed and emerging- during the last eighteen months is the principal reason for FPI’s indifference towards India. If their sustained selling strategy is to change, there should be an end to the hostilities in West Asia and decline and decline in crude prices,” Vijayakumar said.
(Data Inputs from Ritesh Presswala)
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