Nifty at 7-month high but here's why your stock portfolio is still sulking

Economic Times

16-05-2025

Nifty 50 hit a 7-month high, but the rally is narrow and large-cap driven, leaving most portfolios lagging. Over 75% of stocks remain in the red despite recent gains in mid- and small-cap segments, says SAMCO Securities.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
India's benchmark Nifty 50 index has surged past the 25,000 mark, touching a fresh seven-month high this week. But while the index may be celebrating, chances are your portfolio isn't — and there's a clear reason why.The Nifty 50 climbed 4.21% for the week to close at 25,019.80 on Friday, driven by optimism over easing geopolitical tensions with Pakistan, progress in trade negotiations with the United States, and hopes of a domestic rate cut. The Sensex also posted a weekly gain of 3.62%, ending at 82,330.59. But beneath the surface of these headline highs lies a sharply divided market, reflecting how the rally was not a broad-based one."The Nifty 50 has reclaimed the 25,000 mark after a long, 7-month slog. But before you pop the champagne, take a closer look: the index may be shining, but your portfolio might still be sulking in a corner," said Apurva Sheth, Head of Market Perspectives & Research at SAMCO Securities.Since October 15, 2024, the benchmark index has returned just 0.02%, while broader market segments have lagged significantly. The Nifty Midcap 150 has dropped 6.09%, the Nifty Smallcap 250 is down 12.50%, and the Nifty Microcap 250 has slipped 12.22%."This isn't a broad-based bull run. It's a narrow rally led by a handful of large caps while the rest of the market has been quietly bleeding," Sheth said.While the index appears buoyant, the broader market tells a different story. A detailed analysis by SAMCO Securities of 730 companies—excluding 20 recent IPOs—shows that nearly 75% of stocks are still in the red. Only a small fraction of the market has delivered positive returns, with the majority of listed names still underwater.'If you're stuck in one of the 170 stocks that are down 25% to 50%, this 'rally' feels more like a recession,' Sheth said. He warned that the supposed market strength is largely illusory, driven by select large-caps that mask the broader pain being felt across portfolios.This week, mid-cap and small-cap stocks did see a rebound, with the Nifty Midcap and Smallcap indices gaining 7.2% and 9.2% respectively. The uptick was led by defence stocks and strong post-earnings moves in key names. However, the bounce does little to offset the persistent drag over the past seven months.'This isn't a bull market—it's a bull illusion. If you're not in the handful of heavyweight stocks pulling the index up, you're likely still in pain,' Sheth said. For most investors, the milestone of Nifty at 25,000 offers little solace. As he puts it, 'The next time someone says, 'Nifty's at 25k!' — just ask: 'Yes, but is your portfolio?''Also read | Market Wrap: Financials, IT stocks drag D-Street lower; Sensex sheds 200 pts, Nifty below 25,100 (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)