Why Nifty is hitting record highs but your portfolio isn't
What's the story
India's benchmark indices, the Nifty and Sensex, have hit new all-time highs today. The surge is mainly due to a stronger-than-expected 8.2% GDP growth in the second quarter of this fiscal year. The Nifty 50 gained over 100 points, hitting a new high of 26,326 just days after its previous all-time high of 26,310.45 on November 27. Meanwhile, the S&P BSE Sensex jumped by over 300 points to open at its own peak of over 86,000 this morning.
Market performance
Broader market indices also gain
Along with the benchmark indices, broader market indices have also gained. This is due to a significant drop in volatility, which indicates near-term stability for investors. Among the top gainers on the Nifty50 were JSW Steel, Adani Ports, SBI, TMPV, and ONGC. However, ITC, IndiGo, Tata Consumer Products, Bajaj Finance, Nestle India, and Titan were among those that lagged behind.
Market analysis
Why your portfolio isn't keeping up with Nifty's climb
The ongoing Indian market rally hides an unusual story beneath headline numbers. While the Nifty index has hit a new record, most retail investors see their portfolios below the September 2024 peak. This gap is due to the rally's narrow base. Just eight stocks—HDFC Bank, RIL, ICICI Bank, Bharti Airtel, L&T, ITC, Infosys, and SBI—account for 50% of Nifty. When a few rise, the index climbs, but 330 NSE 500 stocks, dominating retail portfolios, remain below prior highs.