Indian equity markets are scaling fresh peaks, but beneath the surface, the rally remains unusually narrow. While the Nifty has jumped 1,550 points since early October, only a small group of heavyweight stocks is driving the majority of the gains. Much of the broader market continues to lag despite headline indices showing strength.
Nifty Briefly Crosses All-Time High
On Thursday, the Nifty 50 rose as much as 0.7 percent, touching a new all-time high of 26,246.65, surpassing its September 2024 peak. Although it later shed part of its intraday gains, the index still closed 0.5 percent higher. The BSE Sensex also ended close to its own record, finishing the day just 350 points away.
However, the strong index performance does not reflect broad market participation, with several segments failing to match the benchmark’s momentum.
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Mid- and Small-Cap Indices Lag Behind
Mid- and small-cap stocks continue to struggle despite the frontline rally. The BSE MidCap index is still about 5 percent below its record high. The BSE SmallCap index lags even further, remaining nearly 9 percent short of its all-time peak.
These gaps highlight the selective nature of the current market uptrend, unlike earlier bull runs, where gains were widely distributed across sectors and categories.
Six Heavyweights Driving Nearly 60% of Nifty Gains
The Nifty’s rally since early October has been supported overwhelmingly by just six stocks. These heavyweights —
Reliance Industries, HDFC Bank, Bharti Airtel, SBI, L&T, and Axis Bank have collectively contributed nearly 60 percent of the index’s 1,550-point rise.
With large index weights and strong performance, these companies have disproportionately pushed the benchmark higher even as other constituents contributed very little.
Next Seven Stocks Add Another 27% to the Rally
Following the top six contributors, the next seven —
Infosys, Shriram Finance, HCL Tech, TCS, M&M, ICICI Bank, and Asian Paints — provided an additional 27 percent of the Nifty’s total gains during the period.
Together, these 13 stocks accounted for almost 87 percent of the benchmark’s entire rise, underlining the extremely concentrated nature of the current market rally.
Half of Nifty Stocks Barely Supported the Index
In stark contrast, half of the Nifty’s constituents contributed only 15 percent of the overall gain. Of these:
15 stocks added only single-digit points, and
11 stocks added between 10 and 50 points each.
This minimal support from a large section of the index demonstrates how limited the participation has been.
11 Nifty Stocks Declined During the Period
Not all stocks moved in tune with the rally. Eleven Nifty stocks declined, including:
Eicher Motors
Tata Motors (Passenger Vehicles)
HUL
NTPC
Trent, among others
Their negative performance further widened the gap between outperformers and laggards, reinforcing the narrowness of the uptrend.
A Rally Led by Few, Leaving Many Investors Out
The market’s new highs are built on a foundation supported by only a handful of stocks. With the broader universe — especially mid- and small-caps — failing to participate meaningfully, many investors remain on the sidelines even as indices climb.
The rally, though impressive at the headline level, shows clear signs of being selective rather than broad-based.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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