Sensex, Nifty hit record high after 14 months, but broader market still lags

India’s benchmark indices reclaimed record territory on November 27, with the Sensex and Nifty hitting fresh all-time highs for the first time since 26 September 2024. The long-awaited breakout was driven by growing expectations that both the Federal Reserve and the Reserve Bank of India could begin cutting interest rates as early as next month, igniting optimism across heavyweight stocks.

Yet, the celebration at the top masks a more fragile reality underneath. Over the past 14 months, the performance within the Nifty basket has been sharply uneven. Only 13 stocks have delivered double-digit returns, while 24 have ended in negative territory. Another eight have gained less than 5 percent, and five have produced returns between 5 and 9 percent — a pattern that underscores the narrowness of the current advance.

“The rally is powered by narrow leadership rather than broad participation, and that is never a healthy sign of late-cycle bulls,” a foreign broker said on condition of anonymity.

The strain is even clearer in the broader market. The BSE MidCap index is down 4 percent from where it stood 14 months ago, while the BSE SmallCap index has dropped more than 8 percent over the same period. Despite the headline indices setting new highs, the wider market remains well below the peaks it touched more than a year ago.