Why Sensex lags behind Nifty in race to new highs? Blame it on these top gainers BSE index lacks

The Sensex has given around 11 percent returns year-to-date, however, the Nifty is up close to 12 percent in 2023 so far.

The recent slew of positive global cues, a strong domestic GDP growth, an easing dollar index, and a return of foreign institutional investors gave enough fodder for the bulls of Dalal Street to charge the NSE Nifty50 to a fresh record high on December 1.

However, its counterpart BSE Sensex lagged in the race to the top as it still stands around 450 points away from its all-time peak.

At close, the Nifty50 was up 134.75 points or 0.67 percent to 20,267.90 after scaling a record high of 20,285.15. On the other hand, the Sensex was about 400 points shy of its record high of 67,927, as it settled 492.75 points or 0.74 percent higher at 67,481.19.

The divergence in momentum for the two benchmark indices can be attributed to one major factor: the absence of top-performing stocks such as Adani group and Hero Moto, which are there on the Nifty, but are not part of the Sensex.

The BSE S&P Sensex is a list of top 30 stocks by market capitalisation, while the Nifty has the top 50 names. Some of the top performers in the past week that propelled the Nifty to its new peak are not part of the Sensex.

"Some of the 20 stocks missing from the Sensex have been outperformers on the Nifty50, which has pushed the latter to a record high faster than the former," said Sham Chandak, head of institutional broking at Elios Financial Services.

Hero MotoCorp, which turned out to be the top performer on the Nifty since November 24, is not a part of the Sensex. The stock has surged over 7 percent in the past week, riding high on expectations of sustained demand for two-wheelers, aided by a rural recovery and the upcoming wedding season.

Besides Hero MotoCorp, two Adani conglomerate stocks - Adani Enterprises and Adani Ports and Special Economic Zone - that jumped around 6 percent and 4 percent in the past week are missing from the Sensex.

These Adani Group stocks surged after the Supreme Court earlier this week reserved its verdict and said that it couldn't order a probe into the conglomerate based only on allegations of fraud raised by US short-seller Hindenburg and without hearing the entities impacted by its orders.

Easing of oil prices also aided gains for not just oil marketing companies, giving them more headroom to make gains, but also for FMCG majors as it reduced their input costs. As a result, BPCL and Britannia Industries also made it to the list of top gainers on the Nifty in the past week.

The two stocks gained 6 percent and 5 percent, but were not part of the Sensex, yet again.

However, the absence of major top performers in the Sensex is not to say that the index did not fare well. The Sensex has given around 11 percent returns year-to-date, however, the Nifty is still the frontrunner in the race by just an inch as it is up nearly 12 percent so far this year.

It goes without saying that the Sensex too is headed to a fresh lifetime high and it's just a matter of playing catch-up as the overall market momentum remains bullish.