A rising tide lifts all boats: Market breadth indicator hits 16-year high

Advance/decline ratio for April 2025 currently at 1.59, a level last seen in May 2009

The current market rally is lifting nearly all stocks, with advancing stocks outnumbering decliners by the widest margin in 16 years.

 

The advance/decline ratio (ADR) for April 2025 is currently at 1.59, a level last seen in May 2009. However, with six trading sessions remaining and global volatility persisting, the final ADR for the month could look very different.

 

This month, 2,752 BSE-listed stocks are trading above their March 28 levels, compared to 1,731 trading lower, reflecting strong market breadth despite global trade war concerns weighing on most markets. The ADR has recovered after a prolonged selloff since October, with February’s ratio falling to its lowest point since March 2020.

 

“We saw a steep, broad-based decline since September, with unprecedented corrections in individual stocks. The rebound from such levels naturally drives strong moves in individual stocks,” said Chokkalingam G, cofounder of Equinomics Research.

 

The sharp turnaround in the market comes after the benchmark indices dropped to their lowest levels since June on April 7. Since then, the Sensex and the Nifty have climbed over 10 per cent.

 

India has emerged as a bright spot among global markets. The optimism stems from India’s insulation from global trade disruptions due to its limited goods exports to the US, which account for just about 1 per cent of gross domestic product. The country’s macroeconomic backdrop is improving on the back of falling oil prices, a weaker US dollar, and expectations of further interest rate cuts.

 

While all sectors have contributed to the rise, banking stocks have stood out. Helped by expectations of margin improvements after deposit rate cuts, the Nifty Bank index has jumped 13 per cent from this month’s lows.

 

The return of foreign portfolio investors (FPIs) has also underpinned the broader gains.

 

FPIs net bought shares worth ₹14,670 crore last week, ending a prolonged selling streak triggered by US trade policy concerns and weak Indian corporate earnings. Short covering and a catch-up with global equity rebounds, amid renewed risk appetite following US tariff exemptions, also played a role. The exemptions stem from US President Donald Trump’s 90-day pause on additional tariffs for nations in trade talks while maintaining a 10 per cent baseline import duty.

 

The ADR crossed 1 in March for the first time since November 2024, reaching 1.05, and has since picked up further.

 

Looking ahead, the market’s direction and the durability of strong breadth will depend on US trade negotiation outcomes and India’s corporate earnings season.

 

“Market breadth may narrow as most of the recovery from oversold levels has taken place. Further gains will need fresh catalysts. Good monsoon, moderating inflation, and banking sector growth will be critical,” Chokkalingam added.