Nifty Inches Closer to Peak, But 25 Out of 30 Sectoral Indices Still Lag Behind

Even as Nifty continues its upward momentum and inches closer to its all-time high, a deeper look at the market reveals a lack of broad-based participation. Out of nearly 30 sectoral and thematic indices, 25 are still trailing and have not yet reclaimed their previous highs.

Selective Rally Driven by Few Sectors

Since the tariff pause announced on April 8, the markets have seen a strong rebound. Both Nifty and Sensex have gained around 11% from their recent lows and are currently just 4% away from their 52-week highs. However, this rebound has largely been driven by select sectors, rather than being a market-wide recovery.

Nifty Bank and Nifty Private Bank have been the frontrunners, trading just 1.3% below their all-time highs. Similarly, Nifty Defence and Nifty Tourism indices are also doing well and are within 3% of record highs.

Many Sectors Still Far From Highs

In contrast, sectors like metals, energy, auto, and real estate have shown limited participation in the ongoing rally. Analysts attribute this underperformance to lingering concerns over global economic recovery, even though tariffs were temporarily paused.

Some of the major laggards include:

• Nifty Media index – 27% below its 52-week high

• Nifty Realty – down 24%

• Nifty Energy – off by 23%

• Nifty PSU, Nifty Microcap 250, and Nifty IT – down 20%, 18%, and 17% respectively

Even core sectors like Nifty Oil & Gas, Auto, FMCG, and Pharma are trailing by 12–18% from their peak levels.

Broader Markets Also Underperforming

The broader market has also not fully joined the rally. The Nifty Midcap 100 is still down by 15%, while the Nifty Smallcap 100 is 10% off its highs. This indicates that investor confidence is still cautious, especially in the mid and small-cap segments.

Key Takeaway

While the headline indices like Nifty are approaching record levels, the overall market breadth remains narrow. Most sectoral indices are yet to catch up, reflecting an uneven recovery across industries. For a sustained bull run, broader market participation will be crucial.