Indian Equity Markets Show Signs of Recovery as Market Breadth Improves:

Suspense crime, Digital Desk : Sentiments among investors began improving in April 2025 and were most optimistic for the BSE, where the advance-decline ratio increased to 1.26, the highest average value since June 2024 (during that month, this ratio remained above 1 for about two months). In comparison, this value stagnated below 1 from December 2024 until February 2025 and in February reached a five-year record low.

Dramatic Recovery of Benchmark Indices after Decline

Key benchmarks demonstrated sharp recovery in April. The Sensex and Nifty surged 3.5% while the BSE MidCap and SmallCap indices gained 3.2% and 1.6% respectively. This development comes after a long correction period that started in late September 2024, during which the Sensex dropped by 14.7% and the Nifty by 15.6%. Mid and small cap stocks underwent even deeper losses of 21.8% and 24.48%.

Increased Interest from Investors Due to Improved Valuations

According to analyst Deepak Jasani, the primary reason behind the rally was the attractive valuations noted for mid and small caps. “Many of these stocks look as though they have hit bottom, while their current share prices, when compared to earnings projections, suggests that there is confidence among investors,” he said.

Furthermore, some corrections have changed the entry barriers, especially for long-term investors investing in fundamentally strong companies who focus on the deeper end of the spectrum according to Sonam Srivastava from Wright Research PMS.

Foreign Investments Come Back, Domestic Investors Retain Bullish Sentiment
After FII’s (Foreign Institutional Investors) have sold over Rs. 2.18 Lakh crore during the period of Extraction from October 2024 to February 2025 and turned net buyers during March and April, investing Rs. 1718 crore and Rs 10559 crore consecutively, domestic investors rated extremely high and had a net equity investment of more than Rs. 2.1 Lakh crore in 2025.

It looks like the outlook still remains positive for the stock market, however is expected to take settle before the earnings season spikes.
Analyst opinion suggests that the upcoming earnings season is likely to has stock specific influence but the movement of most stocks will have a positive dip, however traders are especially careful of the fact that the speed of recovery post the very strong April performance blueprint may slow down a little.