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Nifty Next 50 Index: October 2026 Review 04Nov2026

2026-11-04T10:25:38.161+05:30

Nifty Next 50 Index: October 2026 Review 04Nov2026

(This is my 545th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

Looking up the Next Generation: The Nifty Next 50 is often seen as a pool of future large-cap companies. But its changing composition also offers useful insights into market trends.

A look at the stock and sector weights over the past four months from July to October 2026 reveals some interesting developments.

All data are as at the end of the respective month, unless otherwise stated.

(article continues below)

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Related articles:

The Next Generation of Market Leaders: A Fresh Look at Nifty Next 50's Corporate Landscape 15Jan2026

The Little Secret Behind Nifty Next 50's Recent Success 13May2024

NSE Emerging Indices Fundamentals Comparison 31Dec2025

NSE Indices Calendar Year Returns 2006 to 2025 07Jan2026

Adani Stocks Meltdown and Nifty Next 50 Index 15Feb2023

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2) Stock-wise gist: A Gradual Rise in Stock Concentration:

The top five stocks accounted for 20.1 per cent of the Nifty Next 50 index weight in Oct2026. This was higher than 18.6 per cent in Jul2026. The percentages for the top ten stocks are 33.9 and 32.8 respectively.

The increase is gradual, but it suggests that the leading stocks are gaining a slightly larger share of the index.

Divi's Laboratories and TVS Motor Company remained the two largest stocks in all four months, with weights rising for both the stocks in the past four months.

Hindustan Aeronautics, Tata Motors Ltd (commercial vehicles) and Adani Power also remained among the leading stocks.

Vedanta Aluminium Metal entered, after its demerger from Vedanta Ltd, the index in Sep2026 replacing BPCL.

There is considerable continuity among the top ten stocks. However, their relative weights are changing.

Chart 1 showing top 10 stocks by weight from July to October 2026 >

(click on the chart to view better)

3) Sector-wise gist: Minor shifts in sector leadership:

The sector picture is particularly interesting.

Capital Goods became the largest sector in Oct2026, with a weight of 19.7 per cent. Financial Services followed at 18.0 per cent.

In Jul2026 and Aug2026, Financial Services occupied the top position. Capital Goods moved ahead in Sep2026 and retained the lead in Oct2026.

Auto, power, healthcare and metal sectors have remained in the top 6 positions throughout the four-month period.

These numbers suggest that capital goods, financial services and automobiles are important drivers of the Nifty Next 50.

Top Sectors Dominate the Index:

The combined weight of the top three sectors was 47.7 per cent in Oct2026. This was almost unchanged from Jul2026.

The top five sectors accounted for 66.6 per cent in Oct2026. This was higher than 65.1 per cent in Jul2026.

In other words, nearly two-thirds of the index is represented by just five sectors.

This is an important point for investors. Although the Nifty Next 50 contains 50 companies, its sector exposure is not evenly distributed.

One interesting development is the return of Information Technology to the top ten sectors of the Nifty Next 50.

The IT sector had a weight of 3.3 per cent in Sept2026. It entered the top ten sectors at tenth position.

This was partly driven by the inclusion of Wipro Ltd in the Nifty Next 50 during the Sep2026 index review. Wipro moved out of the Nifty 50 and entered the Nifty Next 50.

By Oct2026, the IT sector's weight had increased to 3.9 per cent, moving up to ninth position.

This is a good example of how index reconstitution itself can change sector representation, even without a major change in the underlying market trend.

Chart 2 showing top 10 sectors by weight from July to October 2026 >

(click on the chart to view better)

4) Investors' takeaway:

The Nifty Next 50 offers exposure to companies beyond the Nifty 50. Historically, some of the leading stocks in the Nifty Next 50 eventually graduate to the Nifty 50.

The Nifty Next 50 therefore serves as an important dashboard for potential future Nifty 50 components.

Stock weights reveal which companies have a larger influence on index performance. Sector weights show where the index has greater exposure.

The latest data points to rising stock concentration and a strong presence of capital goods, financial services and automobiles.

These trends can change over time. Investors should therefore track changes in both stock and sector weights rather than assume that the index always offers broad diversification.

The Nifty Next 50 is not simply a list of tomorrow's large-cap companies. It is also a reflection of changing market leadership.

Potential Nifty 50 stocks?

Divi's Laboratories and TVS Motor Company, currently the two largest stocks of the Nifty Next 50 by weight, could be among the candidates for an inclusion in the Nifty 50 in the next index review in Mar2027.

Their potential elevation would be another example of the Next 50 acting as a pipeline for future Nifty 50 stocks.

This is just for educational purposes. This should not be construed as investment advice. You had better consult your own financial adviser before considering any investments.

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Additional data:

1) Comprehensive data Nifty Next 50 (three images below) :

Top 10 stocks Mar2025 to Dec2025

Corporate group concentration Dec2025

Sector weights in Dec2025 - Nifty Next 50 vs Nifty 500

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References:

Tweet thread 23Apr2026 on Nifty Next 50 index

Tweet thread 28Oct2025 on Nifty Next 50 index

Nifty Next 50 index factsheet - PDF latest month

Nifty Indices Factsheets (NSE Indices) 09Jul2026 - for old factsheets

Nifty Next 50 factsheet as on 31Oct2026 >

Nifty Total Market Index: The Big Picture for October 2026

2026-11-03T11:20:19.810+05:30

Nifty Total Market Index: The Big Picture for October 2026 03Nov2026

Follow @vrk100

(This is my 544th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

The Nifty Total Market Index offers one of the broadest views of the Indian stock market. It covers 750 stocks across large, mid, small and microcap segments.

With full market capitalisation coverage of about 88 per cent of Indian stock market, Nifty TM index can be used as a useful proxy for understanding the broader Indian equity market.

This blog delineates how its leading stocks and sectors have changed over the past four months, from July to October 2026. All data are as at the end of the respective month, unless otherwise stated.

(article continues below)

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Related articles:

Nifty Total Market Index: Sector Rotation So Far in 2026 11Oct2026

Inside the Nifty 500 Index: How It Changed from 2021 to 2026 28Jul2026

Nifty 500 Snapshot 30Jun2026

Beneath the Surface: What 750 Stocks Reveal About Market Breadth 05Apr2026 (Nifty Total Market Index)

Inside the BSE 500 and S&P 500: Top Stocks, Top Sectors, Big Risks 31Dec2025

NSE Emerging Indices Fundamentals Comparison 31Dec2025

BSE 500 vs Nifty 500: Same Market, Different Indices 31Dec2025

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2) Stock-wise summary: Stability at the Top:

The top of the index has seen very little change. HDFC Bank, ICICI Bank, Reliance Industries, Bharti Airtel and Larsen & Toubro (in that order) retained the top five positions throughout the four months.

The changes were largely further down the list. State Bank of India moved between sixth and seventh positions, while Infosys and Axis Bank also saw minor shifts.

The notable change in October was Bajaj Finance entering the Top 10, replacing Mahindra & Mahindra.

The combined weight of the top 10 stocks stood at 28.2 percent in July. It dipped to 27.2 percent in September before recovering to 28.5 percent in October. The top five stocks accounted for roughly 19 percent to 20 percent throughout.

Chart 1 showing top 10 stocks by weight from July to October 2026 >

(click on the chart to view better)

3) Sector-wise summary: Healthcare Gains Ground:

Financial Services sector continues to dominate the index, accounting for nearly 30 percent of its weight. However, its share was marginally down from 30.2 percent in July to 29.8 percent in October 2026.

Healthcare was the biggest gainer among the leading sectors. It moved from fourth position in July to second in October. Its weight increased from 7.4 percent to 7.7 percent.

Capital Goods moved in the opposite direction. Its weight declined from 7.7 percent to 7.6 percent, while its ranking slipped from second to third.

Automobiles also lost some ground, with their weight falling from 7.4 percent to 7.1 percent.

Information Technology showed a notable improvement. Its weight rose from 6.3 percent in July to 7.0 percent in October, moving into fifth position.

Consumer Services: New-Age Businesses Gain Ground:

Consumer Services is a sector worth watching. It includes several fast-growing businesses that reflect changing consumption patterns in India.

These include Eternal (Zomato), Trent, Swiggy, Indian Hotels Company, Nykaa and Lenskart.

The sector's weight in the Nifty Total Market Index increased from 3.9 percent in July to 4.3 percent in October. It also moved up from ninth to eighth position among the top 10 sectors.

The rising weight reflects the growing presence of businesses linked to online food delivery, quick commerce, organised retail, hospitality, beauty and lifestyle consumption. These are among the evolving segments of the Indian econony.

This makes Consumer Services an interesting sector to track, as it captures some of the structural changes taking place in India's consumption landscape.

Chart 2 showing top 10 sectors by weight from July to October 2026 >

(click on the chart to view better)

4) What Does This Tell Us?

The four-month data suggests that the Indian market's overall structure remains relatively stable. The leading stocks and sectors have not changed dramatically. However, some interesting shifts are taking place beneath the surface.

Consumer Services stands out. It brings together several businesses at the forefront of India's changing consumption story, including Eternal (Zomato), Swiggy, Trent, Nykaa, Lenskart and Indian Hotels.

Its growing presence in the index reflects the increasing importance of these newer business models in India's equity market.

The takeaway is that while traditional heavyweights such as banks continue to dominate the market, newer consumption-driven businesses are gradually gaining ground. Consumer Services is a sector worth watching over the coming years.

This is just for educational purposes. This should not be construed as investment advice. You had better consult your own financial adviser before considering any investments.

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Additional data:

1) Nifty Total Market vs Nifty 50 (data as of 31Oct2026):

The top 10 stocks have identical rankings in both indices, but carry higher weights in the Nifty 50.

But the top 10 sectors in these two indices are not identical. As shown above, Financial Services, Healthcare, Capital goods, Auto and IT are the top five in Nifty Total Market. However, the top five sectors in Nifty 50 are Financial Services, Oil & Gas, IT, Auto and Telecommunication.

Financial Services dominates both, with a much higher 37.1 per cent weight in the Nifty 50 versus around 30 per cent in the Nifty Total Market.

The Nifty Total Market offers wider exposure to midcap, smallcap and microcap companies, including emerging businesses in Consumer Services.

While the Nifty 50 captures India's largest companies, the Nifty Total Market offers a broader picture of the Indian equity market.

2) Top sectors: No of companies by industry group / sector in Nifty TM Index (latest data 31Oct2026) >

No of companies Industry group / sector

50 industrial products

48 pharmaceuticals & biotechnology

40 chemicals & petrochemicals

40 consumer durables

39 IT software & services

37 auto components & equipment

35 electrical equipment

34 banks

24 construction

24 power

24 retailing

20 NBFCs (part of finance)

20 capital markets

20 real estate (realty)

19 healthcare

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References:

Nifty Total Market index factsheet - PDF latest month

Nifty Indices Factsheets (NSE Indices) 09Jul2026

Nifty TM factsheet as on 31Oct2026 >

Nifty Indices Internals: Reading the Hidden Damage – October 2026 Update

2026-11-01T21:00:18.349+05:30

Nifty Indices Internals: Reading the Hidden Damage – October 2026 Update 01Nov2026

Follow @vrk100

(This is my 543rd blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

Imagine two boxers emerging from a fight. Both are still standing. To an outsider, they might appear equally healthy.

But one has suffered considerably more injuries and internal damage than the other. The fact that he is still standing doesn't mean he hasn't taken a beating. He feels every bruise.

The stock market is no different.

The headline index is what the outsider sees. Market internals reveal the bruises suffered by individual stocks.

A handful of heavyweight stocks can keep a market cap-weighted index, like Nifty 50, holding up well even while dozens of other stocks are hurting.

An index can look healthy while a large number of its constituents are nursing serious injuries.

This is why looking at the Nifty alone can be deceptive. To understand the true health of the Indian stock market, we need to look beneath the surface.

2) What do the numbers reveal?

The chart below shows data covering three segments of the Indian equity market:

Nifty 50,

Nifty Next 50 and

Nifty MidSmallcap 400.

Together, they represent the Nifty 500 universe, covering nearly 85 per cent of India's listed market capitalisation.

The October 2026 snapshot reveals some interesting facts.

Chart showing Nifty Indices Internals of three Nifty indices as of 31Oct2026 >

In the Nifty MidSmallcap 400 index, 68% of stocks (272 stocks of 400) are more than 20% below their respective 52-week highs. More significantly, 41% of stocks are down more than 30%, 13% more than 40%, and 4% of stocks have fallen more than 50%.

The corresponding figures for Nifty Next 50 are 64%, 24%, 8% and 0%.

For Nifty 50, they are 56%, 14%, 0% and 0%, respectively.

The hierarchy is quite clear. Mid- and small-cap stocks have experienced the most widespread price damage, followed by Next 50 stocks, while Nifty 50 components have been relatively more resilient.

Interestingly, the indices themselves are down relatively less from their respective 52-week highs: Nifty MidSmallcap 400 by 10.4%, Nifty Next 50 by 9.7%, and Nifty 50 by 12.6%.

This contrast further illustrates how headline index performance can mask widespread weakness among individual stocks.

One single chart, like the above, tells you so many things about the three market segments:

> drawdowns (%age of fall from 52-week high)

> downside protection of indices

> their relative riskiness

> market breadth

> how volatile the individual stocks are, compared to the index itself

As shown in the above chart, mid- and small-cap stocks are riskier than their counterparts in the large-cap segment.

A note on the data: These figures measure declines from individual 52-week highs, not peak-to-trough drawdowns over a common period. They indicate stock-level price damage and market breadth, not comparable investment-period losses.

3) Comparing with Dec2025 figures: The index versus the reality beneath it:

The comparison between December 2025 and October 2026 is revealing.

In the MidSmallcap 400, 51% of stocks were more than 20% below their respective 52-week highs in December 2025. By October 2026, this proportion had increased to 68%.

In other words, more than two out of every three stocks in this segment are now significantly below their individual highs.

The underlying weakness has become more widespread, even though the index itself declined by only 3.5%.

The picture is similar in the other segments:

Nifty Next 50: 36% in December 2025 versus 64% in October 2026 (index declined by 2.4%).

Nifty 50: 10% in December 2025 versus 56% in October 2026 (index fall of 11.8%).

The deterioration in Nifty 50 is particularly striking. Even the large-cap universe, whose headline index performance can be supported by a handful of heavyweight stocks, shows substantial constituent-level weakness.

The message is clear: the damage beneath the headline indices is considerably greater than index performance alone might suggest.

(note: see footnotes below for data as of 31Dec2025)

Why does this happen?

Market-cap-weighted indices, like, Nifty 50 and others, give disproportionate importance to their largest constituents. A handful of heavyweight stocks can hold up the index even when hundreds of smaller constituents are falling sharply.

Consequently, the index's performance may be very different from the experience of an investor holding a diversified portfolio of individual stocks.

Market-cap weighting can mask widespread weakness because a handful of heavyweight stocks can support the index even when many other constituents are falling.

As shown above, the deterioration in market breadth is not confined to mid- and small-caps. It has spread across the large-cap universe as well.

4) What should investors take away?

Index stability does not necessarily mean that individual stocks are resilient.

For investors who cannot devote time to analysing markets, low-cost passive funds offer a sensible way to participate in long-term wealth creation.

Consistently beating the index after costs and taxes is difficult.

Look beneath the surface:

An index tells you how the market is performing. Its internals tell you how its constituents are suffering.

Just as a boxer can remain standing despite serious injuries, an index can appear healthy while many of its stocks are badly bruised.

Don't judge the market by its headline indices alone. Look beneath the surface.

That’s why it’s important to look at index internals (like internals of Nifty Indices) to understand the real health of the market.

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References:

NSE historical index data

NSE Indices - market watch

Screener.in - NSE indices

Tweet thread 31Dec2025: Nifty Indices internals >

Chart showing Nifty Indices internals of three Nifty indices as of 31Dec2025 >

Tweet thread 01Apr2026: Nifty indices internals >

Tweet thread 01Jul2025: Nifty indices internals >

Tweet thread: Nifty indices internals >

Charts showing data of Nifty indices internals as of 31Mar2026, 31Sep2025, 30Jun2025 and 31Mar2025 >

JP Morgan Guide to Markets Sep2026

2026-10-30T16:26:39.991+05:30

JP Morgan Guide to Markets Sep2026

Follow @vrk100

(This is for information purposes only. This should not be construed as a recommendation or investment advice even though the author is a CFA Charterholder. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

JP Morgan Asset Management publishes a comprehensive presentation every month end, containing various slides on global markets, especially those relating to the US markets.

This is a very useful and informative guide for financial market professionals or FMPs. This "JP Morgan Guide to the Markets" can be accessed here. The following are some of the highlights / images presented in this guide: all the data are at the end of 30Sep2026:

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Related Blogs:

JP Morgan guide to Markets Jun2026

JP Morgan Guide to Markets Dec2025

JP Morgan Guide to Markets Jun2025

JP Morgan Guide to Markets Mar2025

JP Morgan Guide to Markets Feb2025

JP Morgan Guide to Markets Dec2024

JP Morgan Guide to Markets Oct2024

JP Morgan Guide to Markets Sep2024

JP Morgan Guide to Markets Jul2024

JP Morgan Guide to Markets Jun2024

JP Morgan Guide to Markets Mar2024

JP Morgan Guide to Markets Dec2023

JP Morgan Guide to Markets Sep2023

JP Morgan Guide to Markets Aug2023

JP Morgan Guide to Markets Apr2023

JP Morgan Guide to Markets Mar2023

JP Morgan Guide to Markets Jan2023

JP Morgan Guide to Markets Dec2022

JP Morgan Guide to Markets Oct2022

JP Morgan Guide to Markets Sep2022

JP Morgan Guide to Markets Jul2022

JP Morgan Guide to Markets Apr2022

JP Morgan Guide to Markets Jan2022

Global Market Data 30Sep2026

2026-10-19T06:43:05.933+05:30

Global Market Data 30Sep2026

Follow @vrk100

(This is my 542nd blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

This blog serves as a quarterly archive of financial market data as at 30Sep2026, compiled from primary and reputed sources such as BSE India, NSE India, Value Research, Bloomberg, CNBC and other data providers.

It presents QTD (Quarter to date) and YTD (Year-to date) performance across equity indices, bonds, commodities and currencies. Screenshots and data tables are preserved to maintain a record of market movements.

The objective is to create a reliable historical reference for future research, comparison and posterity.

Here are the data tables and screenshots:

(click on the images to view better)

Quarter to date (QTD) global market data of stocks, bonds, currencies and commodities:

Year to date (YTD) global market data of the same:

QTD:

Bond yields have gone up across the nations, as there is no end to US Iran war and crude oil prices have gained the most during the Jul-Sep2026 quarter. There are also concerns about bulging national debt, especially in the US.

Bitcoin has outperformed other asset classes, whereas currencies have remained stable, though Japanese Yen weakened against the dollar. The US - India 10-year bond yield spread is down 41 basis points (one percentage points equals 100 basis points).

YTD:

Bond yields have soared across the globe in the US, Europe as well as Asian nations.

The biggest gainers, so far, are crude oil prices during 2026. The US dollar index too has surged. Among equity market, Nikkei 225 and Nasdaq Composite are the winners, with Indian stocks underperforming global markets a lot.

Other screenshots >

CNBC markets

CNBC commodities

Trading Economics GDP macros

Trading Economics global government bond yields

MSCI EM Index (net returns)

BSE market cap of all companies

RBI one year deposit rate data; and other data of rates and ratios RBI GetKeyWords

Value Research BSE Indices - annual and trailing returns

Value Research Mutual Fund Monitor - annual and trailing returns

BSE 500 sector wise free float market cap

BSE 1000 sector wise free float market cap

Bitcoin CoinMarketCap - Data on crypto currencies

Companies Market Cap - Top companies in the world by market cap

Past performance does not guarantee future returns. Please do your own research or consult a qualified financial adviser before making investment decisions.

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References:

Market Data quarter end:

BSE market cap of all companies

RBI one year deposit rate data; and other data of rates and ratios RBI GetKeyWords

Value Research BSE Indices - annual and trailing returns

Value Research Mutual Fund Monitor - annual and trailing returns

VR liquid funds returns - annual and trailing returns

BSE 500 sector wise free float market cap

BSE 1000 sector wise free float market cap

IBJA rates gold and silver - IBJA PDF as on 30Jun2026

Nifty 500 data quarter tend from Screener.in

CNBC markets

CNBC commodities

Trading Economics GDP macros

Trading Economics global government bond yields

CCIL India

Bitcoin CoinMarketCap

Companies Market Cap - Top companies in the world by market cap

Bloomberg Commodity Index

USD RMB

DXY US dollar index - USDX

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For Global Market Data between 30Sep2024 and 30Jun2026, check various reports in my blog Forex Data Bank 09Jun2024

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Related blogs:

Global Market Data 30Jun2024

Global Market Data 31Mar2024

Global Market Data 2013 to 2023 (11-year data)

Global Market Data 2012 to 2022 (11-year data)

Global Market Data 31Dec2023

Global Market Data 30Sep2023

Global Market Data 31Mar2023

Global Market Data 31Dec2022

Global Market Data 30Sep2022

Global Market Data 30Jun2022

Global Market Data 31Mar2022

Global Market Data 31Dec2021

Global Market Data 30Sep2021

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Nifty Total Market Index: Sector Rotation So Far in 2026

2026-10-11T16:47:29.828+05:30

Nifty Total Market Index: Sector Rotation So Far in 2026 11Oct2026

Follow @vrk100

(This is my 541st blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

This article looks at how sector weights in the Nifty Total Market index have changed during 2026.

1) What Is Nifty Total Market?

Nifty Total Market provides a broad view of the Indian equity market. It comprises 750 stocks: the 500 stocks in Nifty 500 and 250 stocks from Nifty Microcap 250.

The index is based on free-float market capitalisation (to be exact, the Nifty TM has 755 stocks as of 30Sep2026).

As of the latest data, the total market capitalisation of all companies listed on BSE, including the recently-listed NSE Ltd, is Rs 465 lakh crore (USD 4.82 trillion). Nifty Total Market accounts for Rs 423 lakh crore, or more than 90 per cent of this total.

With such broad market coverage, Nifty Total Market index can reasonably be considered a proxy for the Indian equity market.

(article continues below)

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Related articles:

Inside the Nifty 500 Index: How It Changed from 2021 to 2026 28Jul2026

Nifty 500 Snapshot 30Jun2026

Beneath the Surface: What 750 Stocks Reveal About Market Breadth 05Apr2026 (Nifty Total Market Index)

Inside the BSE 500 and S&P 500: Top Stocks, Top Sectors, Big Risks 31Dec2025

NSE Emerging Indices Fundamentals Comparison 31Dec2025

BSE 500 vs Nifty 500: Same Market, Different Indices 31Dec2025

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2) Sector Breakdown: September 2026

Chart showing sector composition of Nifty Total Market as at the end of 30Sep2026, compared with 31Dec2025 >

The September 2026 sector breakdown provides the starting point for looking at the changes during the year. Nifty Total Market has 20 sectors in total, but only top 10 sectors are shown in the above chart.

3) Sector Changes YTD:

Between 31Dec2025 and 31Sep2026, Financial Services remained the largest sector, though its weight declined from 30.8 per cent to 29.8 per cent.

Capital Goods saw the biggest rise in ranking. It moved up from sixth place to second, with its weight increasing from 6.2 per cent to 8.1 per cent.

Healthcare moved up from fifth to third. Information Technology moved down from second to sixth, with its weight declining from 7.9 per cent to 6.0 per cent.

Oil & Gas also moved down, from third to fifth.

Despite these changes, overall sector concentration changed more or less the same. The Top 3 sector weight increased from 43.3 per cent to 45.3 per cent, while the Top 5 increased from 58.3 per cent to 59.1 per cent.

YTD sector returns:

The 2026 YTD returns show wide dispersion among the major sectors. Nifty Metal (+15.4%), Telecommunications (+20.2%), Capital Goods (+11.5%) and Healthcare (+10.8%) performed relatively well, while IT (-25.9%), FMCG (-19.2%), Oil & Gas (-12.7%) and Financial Services (-10.0%) declined (See blog for more).

Year-to-date sector returns provide useful context for these changes in sector weights. There has been a wide divergence in sector performance during 2026, with some sectors gaining strongly while others declining sharply.

This helps explain some of the changes in sector weights, although changes in index constituents also play a role.

4) Why Did Sector Weights Change?

Sector weights change for two main reasons:

> changes in the market values of existing constituents, and

> changes in the constituents themselves.

This distinction is important for longer-term comparisons.

Nifty Total Market is reviewed twice a year, in March and September. The Mar2026 review brought 59 stocks into the index and removed 59. The Sep2026 review included 53 stocks in and excluded 53.

Thus, 112 stocks were added and 112 removed across the two reviews.

However, the number of stocks added or removed is only an indication of changes in the constituent base. It does not by itself explain changes in sector weights.

For example, Capital Goods had 15 additions and 17 deletions, a net decline of two stocks. Yet its Nifty Total Market weight increased from 6.2 per cent to 8.1 per cent year to date.

This shows that changes in sector weight are influenced not only by constituent changes, but also by relative price performance and the free-float market capitalisation of the stocks involved.

Therefore, a sector's changing weight can reflect market performance, changes in index constituents, or both.

5) Gist

Year-to-date data shows meaningful shifts in sector weights, with Capital Goods and Healthcare gaining ground while Information Technology and Oil & Gas losing weight.

Despite broad market coverage, Nifty Total Market retains meaningful sector concentration, with Financial Services alone accounting for nearly 30 per cent of the index.

Don't miss the additional notes and references given below.

Past performance does not guarantee future returns. Please do your own research or consult a qualified financial adviser before making investment decisions.

(Section 4 above was altered on 13Oct2026 to clarify that changes in sector weights are infllued not only by constituent changes, but also by relative performance and the free float market capitalisation of stocks involved).

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References:

Nifty indices factsheets

Nifty Total Market factsheet - PDF for Sep2026

Nifty Total Market Research Paper 30Nov2021

NSE Index Dashboard

NSE Indices methodology document

Nifty Indices Factsheets (NSE Indices) 09Jul2026

Press releases by NSE Indices Ltd

Screenshot of Nifty Total Market factsheet as of 30Sep2026 >

Screenshot of Nifty Total Market factsheet as of 31Dec2025 >

Screenshot of Nifty Total Market factsheet as of 31Dec2024 >

Screenshot of Nifty Total Market factsheet as of 31Dec2023 >

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Additional notes:

1) YTD returns of top 10 sectors by weight in Nifty Total Market as at end-Sep2026 >

2) A Small but Important Nuance:

The number of stocks in a dedicated Nifty sector index is not the same as the number of companies belonging to that sector within Nifty 500 or Nifty Total Market (you can find the number of stocks present in each sector in the image provided in additional note 1 above).

For example, the Nifty Financial Services index has a selected set of only 20 stocks. Financial Services within Nifty Total Market includes the Financial Services companies (with more than 100 stocks of Financial Services' stocks dominating the Nifty TM index) that are constituents of the Nifty TM index.

The two represent different universes and serve different purposes.

3) Difference between Nifty 500 and Nifty Total Market:

As far as sector representation / concentration is concerned, there is not much difference between Nifty 500 and Nifty Total Market indices according to the latest NSE data. Though Nifty TM has 250 more stocks (micro-cap stocks) than those in Nifty 500, this doesn't materially change the broad sector representation captured by Nifty 500.

If you're interested in knowing about Nifty 500, you can my earlier blog -- which explored the changes over the past five years.

4) NSE Indices (Nifty Indices) launched 11 new Nifty sector indices on 15Jun2026. They are:

Nifty Power

Nifty Capital Goods

Nifty Telecommunications

Nifty Construction

Nifty Consumer Services

Nifty Commercial & Transport Services

Nifty Retail

Nifty Hospitals

Nifty NBFC

Nifty Housing Finance

Nifty Insurance

5) As of current data, there are only five passive funds (one ETF plus four index funds) tracking Nifty TM index -- and these have meagre assets under management, making them mostly not suitable (uninvestable for now) for most retail investors.

Nifty Smart Beta Indices Review – September 2026 10Oct2026

2026-10-10T11:10:34.867+05:30

Nifty Smart Beta Indices Review – September 2026: Nifty Smart Beta Indices Performance and Valuation at a glance 10Oct2026

Follow @vrk100

(This is my 540th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

(check Update 25Oct2026 at the end of the blog with portfolio overlap of smart beta funds with Nifty 50; and Trendlyne ETF Dashboard with ETF volumes)

This is a follow-up to my September 2026 article on factor investing and smart beta indices in India. This monthly review tracks how selected Nifty Smart Beta indices are performing against the Nifty 50 and Nifty Midcap 150.

It also looks at their trailing returns and valuations.

The aim is to see which factors are doing well and whether the earlier trends are continuing.

(article continues below)

-------------------------

Related articles:

Nifty Indices Broad Market and Sector Review – September 2026 08Oct2026

Nifty Indices Broad Market and Sector Review - August 2026 06Sep2026

Nifty Smart Beta Indices Review - August 2026 06Sep2026

Nifty Indices Broad Market and Sector Review – July 2026 02Aug2026

Factor Investing in India: Do "Smart Beta" Indices Outsmart Nifty 50 and Midcap 150? 24Nov2025

Nifty Midcap 150 Quality 50 Index: Has Quality Lost Its Edge? 10Aug2025

Decoding the Nifty Midcap 150 Quality 50: A Midcap Strategy Built on Fundamentals 07Aug2025

Passive Titans of India: The Top 10 Equity Indices by Fund Size 17Jul2025

India Flagship ETFs with Low Fees and Fair Trading Volumes 12Jun2025

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter 06Jun2025

How to Buy Nifty Midcap 150 Index (passive funds) 03May2024

Analysis of Nifty 100 Low Volatility 30 Index 12Sep2023

-------------------------

The following analysis is based on the charts attached below.

1. Calendar year returns of smart beta indices

Calendar-Year Returns Show the Risks:

Calendar-year returns highlight the cyclical nature of smart beta strategies: momentum indices surged in 2021 and 2024, but suffered losses in 2022 and 2025.

No strategy leads every year; strong performance in one period can give way to sharp falls in the next.

In 2025, the Nifty 50 gained 11.9 per cent, while the Nifty 500 Momentum 50 lost 7.6 per cent. In 2024, the Nifty 500 Momentum 50 index gained 27.2 per cent, compared with just 10.1 per cent for the Nifty 50 (see chart 1 below for data).

The Nifty Midcap 150 Momentum 50 rose 78.3 per cent, while the Nifty 500 Momentum 50 gained 78.9 per cent in 2021. Such strong years can be followed by weak ones.

Momentum investing is therefore not a smooth ride.

2. Trailing returns of smart beta indices

Nifty Smart Beta Indices: Momentum Holds Up Better, compared to Low Volatility and Quality, Amid Market Weakness:

The Indian stock market had a difficult September 2026. Most Nifty indices fell over the month and the three-month returns were also negative. Yet, longer-term returns remained positive across all the indices shown.

The performance of smart beta indices offers some useful lessons for investors.

September and Recent Performance:

The Nifty 50 fell 6.4 per cent in one month and 4.9 per cent over three months. The Nifty Midcap 150 did worse over the month, losing 7.0 per cent, though it gained 4.6 per cent over one year.

Among the smart beta indices, the Nifty 500 Momentum 50 performed relatively well. It lost 5.8 per cent in one month and 1.7 per cent over three months. Its one-year return was 5.1 per cent. The Nifty Midcap 150 Momentum 50 also delivered a positive one-year return of 4.1 per cent.

Low volatility and quality strategies had a tougher year. The Nifty 100 Low Volatility 30 fell 4.7 per cent over one year, while the Nifty 200 Quality 30 lost 5.4 per cent.

Long-Term Returns Tell a Different Story:

Despite recent weakness, the longer-term picture remains encouraging. The Nifty Midcap 150 Momentum 50 delivered annualised returns of 13.5 per cent over three years, 15.1 per cent over five years and 19.7 per cent over ten years.

The Nifty 500 Momentum 50 also performed strongly, with annualised returns of 11.4 per cent over three years, 12.4 per cent over five years and 18.3 per cent over ten years.

The broad Nifty 50 returned 6.1 per cent annually over three years (one of the worst in recent years) and 11.5 per cent over ten years. These figures suggest that momentum strategies have rewarded patient investors over longer periods, although they can still suffer sharp falls in shorter time periods.

3. Valuations and Dividends Matter

Valuations offer another reason for caution. As at the end of 30Sep2026, the Nifty 500 Momentum 50 had a price-to-earnings ratio of 29.4 and a price-to-book ratio of 5.8. Its dividend yield was only 0.50 per cent.

By comparison, the Nifty 50 had a price-to-earnings ratio of 19.4, a price-to-book ratio of 2.8 and a dividend yield of 1.22 per cent.

The Nifty 200 Quality 30 had a relatively high price-to-book ratio of 7.9, while the Nifty Midcap 150 Quality 50 had a price-to-earnings ratio of 29.7. Investors should remember that strong past returns do not automatically make an index attractive at its current valuation.

Charts numbered 1 to 3 >

all data as at end-30Sep2026 >

Chart 1: Calendar year returns of Nifty "smart beta" indices (from 2018 to 2026) (2026 data till 30Sep2026) >

Chart 2: Trailing returns of Nifty "smart beta" indices >

Chart 3: Nifty "smart beta" indices valuation data >

Click on the charts to view better >

4. Action button

Smart beta indices are cyclical (as shown by calendar and trailing returns above) and strategies that lead in one period can lag sharply in another, so past returns should not be taken as a guide to future performance.

Investors should look beyond the latest returns. Valuations, investment costs, risk tolerance and the time available to stay invested all matter.

Smart beta indices follow specific rules to select and weight stocks. They are not guaranteed to outperform the broader market.

For most individual investors, a diversified portfolio is more sensible than chasing the best-performing strategy of the past. Smart beta strategies may have a role, but they should be chosen carefully and with a long-term view.

Limited ETF trading volumes and low assets under management in many passive funds tracking the smart beta indices also warrant caution, particularly over liquidity, trading costs and ease of exit.

Past performance does not guarantee future returns. Please do your own research or consult a qualified financial adviser before making investment decisions.

- - -

----------------------------------

P.S.: Update 25Oct2026: This update is added after the above blog was published on 10Oct2026:

Key insights from what can be observed from the six combinations (check the six screenshots below) of Nifty 50 and smart beta / factor indices:

a. Nifty 50 + Momentum 30 + Quality 30 looks the most attractive combination for a 3–5 year equity portfolio view.

b. Equal rupee allocation means one-third each. This gives Nifty 50 the role of the core, while Momentum and Quality provide distinct factor exposures.

c. Nifty 50 and Momentum have very little overlap: only 5 common stocks. Nifty 50 overlap is just 6.76%, making Momentum a genuine diversifier rather than another version of Nifty 50.

d. Nifty 50 and Quality have more overlap: 10 common stocks. About 15.97% of Nifty 50 overlaps with Quality, so Quality is less independent than Momentum but still adds a meaningful tilt.

e. Quality and Momentum overlap very little: only 3 common stocks, with 8.44% and 9.10% portfolio overlap. This is particularly attractive when combining the two factors.

f. Low Volatility is very different from Momentum. Only 2 stocks are common, with just 7.11% and 7.55% portfolio overlap. So Low Vol and Momentum are highly complementary to each other.

g. Low Volatility and Quality have substantially more overlap: 8 common stocks, with 25.81% and 33.61% portfolio overlap. This suggests that both factors can create a meaningful common exposure to established, relatively defensive companies.

h. The weakest combination from a diversification perspective is Nifty 50 + Low Volatility 30. There are 25 common stocks, representing 65.57% of Nifty 50 and 83.75% of the Low Vol portfolio. Much of the Low Vol exposure is therefore already present in Nifty 50.

i. Quality is not simply redundant with Nifty 50. Although it overlaps with Nifty 50, it imposes a different selection discipline based on business and financial characteristics. It therefore makes more sense as a complement than Low Vol does.

j. For a 3–5 year horizon, the main attraction of Nifty 50 + Momentum + Quality is not short-term performance. It is the combination of three different return drivers: broad-market exposure through Nifty 50, business-quality exposure through Quality, and price-trend exposure through Momentum.

k. Overall, Nifty 50 + Momentum 30 + Quality 30 as a coherent long-term equity strategy rather than three unrelated bets (but this could go wrong in future when portfolio overlap changes -- which is bound to happen over time). Equal allocation is simple and avoids trying to predict which factor will work next. The main requirement is patience: Momentum and Quality can each go through periods of significant underperformance, so this combination should ideally be judged over five years rather than one year.

l. For a Nifty 50 + Momentum + Quality combination, Nifty 500 Momentum 50 offers an interesting alternative among the two key momentum indices, i.e., Nifty 200 Momentum 30 and Nifty 500 Momentum 50

m. Between the two Momentum indices, which one to choose? The choice depends on how a specific momentum index blends with the other two parts, Nifty 50 and Quality. So, we need to see how the combination of the three looks like.

n. So, we need to compare the two; 1) Nifty 50 + Momentum 30 + Quality 30 versus 2) Nifty 50 + Momentum 50 + Quality 30.

o. As of 30Sep2026, Momentum 30 is more balanced across sectors; lower current valuation; ~6 years of live index history; whereas, Momentum 50 has Higher Capital Goods and Healthcare exposure; higher current valuation; only ~2.3 years of live history.

p. From a portfolio construction perspective, both use momentum-based tilt weighting, but the eligible universe differs — Nifty 200 vs Nifty 500.

q. For Nifty 50 + Momentum + Quality, one needs to focus on complementarity, sector/risk characteristics and construction, not back-tested returns.

1) Portfolio overlap between Nifty 100 Low Volatility 30 and Nifty 200 Momentum 30 as on 30Sep2026 >

2 common stocks with overlap of 7.1% and 7.6% respectively

2) Portfolio overlap between Nifty 100 Low Volatility 30 and Nifty 200 Quality 30 as on 30Sep2026 >

8 common stocks with overlap of 25.8% and 33.6% respectively

3) Portfolio overlap between Nifty 200 Quality 30 and Nifty 200 Momentum 30 as on 30Sep2026 >

3 common stocks with overlap of 8.4% and 9.1% respectively

4) Portfolio overlap between Nifty 200 Momentum 30 and Nifty 500 Momentum 50 as on 30Sep2026 >

23 common stocks with overlap of 77.5% and 74% respectively

5) Portfolio overlap between Nifty 50 and Nifty 100 Low Volatility 30 as on 30Sep2026 >

25 common stocks with overlap of 65.6% and 83.8% respectively

6) Portfolio overlap between Nifty 50 and Nifty 200 Momentum 30 as on 30Sep2026 >

5 common stocks with overlap of 6.8% and 23.9% respectively

7) Portfolio overlap between Nifty 50 and Nifty 200 Quality 30 as on 30Sep2026 >

10 common stocks with overlap of 16% and 45.8% respectively

8) Portfolio overlap between Nifty 50 and Nifty 500 Momentum 50 as on 30Sep2026 >

3 common stocks with overlap of 3.8% and 13.8% respectively

9) Trendlyne ETF Dashboard - ETF volumes: 3-month daily average highst volumes as of 23Oct2026 > Chart showing 3-month daily average volumes >

Nifty 200 Momentum 30 ETFs - ETF volume data

Check NSE ETF marketwatch for historical ETF volumes

Trendlyne all ETFs volumes 3-month daily average (select volume column to see volumes of all kinds of ETFs by descending order)

----------------------------------

References and notes:

Nifty indices factsheets (choose Strategy indices)

Nifty 50

Nifty Midcap 150

Nifty 200 Momentum 30

Nifty 100 Low Volatility 30

Nifty 50 Equal Weight

Nifty Alpha Low Volatility 30

Nifty Midcap 150 Momentum 50

Nifty 500 Momentum 50

Nifty 200 Quality 30

Nifty Midcap 150 Quality 50

Nifty Return profile

Nifty Index Dashboard monthly - Sep2026 PDF

Nifty indices methodology document

--------------

Nifty Indices: YTD returns / year to date returns (on a daily basis) can be obtained from (other data, like, absolute trailing returns index levels PE and PB ratios, Top 5 gainers, Top 5 losers, heatmap, index movers, all constituents, corporate actions, shareholding pattern, corporate results, factsheet, list of constitutent, methodology, setc, too are available): Index tracker of NSE Indices:

Nifty 50
Nifty Midcap 150

Nifty 200 Momentum 30
Nifty 100 Low Volatility 30 index
Nifty 50 Equal Weight
Nifty Alpha Low Volatility 30
Nifty Midcap 150 Momentum 50
Nifty 500 Momentum 50
Nifty 200 Quality 30
Nifty Midcap 150 Quality 50

--------------

Value Research - Compare funds:

VR comparison of index funds:

Nifty 50 - specicifi index fund weblink

Nifty Midcap 150 - specicifi index fund weblink

Nifty 200 Momentum 30 - specicifi index fund weblink

Nifty 500 Momentum 50 - specicifi index fund weblink

Nifty 200 Quality 30 - specicifi index fund weblink

The following Tables / data images, pertaining to the above five Nifty indices, are included here on 23Oct2026 as additional data >

Table B: Marketcap Data

Table C: Valuation / Risk Data

Table D: Top 10 Stocks

Table E: Top 10 Sectors

--------------

Chart showing Index Reconstitution of NSE / Nifty Indices - Nifty Smart Beta Indices Rebalancing Frequency >

--------------

Rupee Vest screenshots comparing four ETFs (data as at end-09Oct2026) > This is just for illustration purposes only >

Nifty Indices Broad Market and Sector Review – September 2026

2026-10-08T20:54:22.067+05:30

Nifty Indices Broad Market and Sector Review – September 2026: Nifty Indices Performance and Valuation at a glance 08Oct2026

Follow @vrk100

(This is my 539th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

This periodic snapshot brings together the latest performance and valuation data, as of 30Sep2026, for the broad Nifty indices and the major market sectors.

The aim is to understand what the numbers are saying today. It is not to predict what will happen next.

The data in this article are as on 30Sep2026, unless otherwise stated.

This article builds on an earlier article (with data as of 31Aug2026). Please check it if you're interested.

(article continues below)

------------

Related blogs:

Nifty Indices Broad Market and Sector Review - Aug2026 06Sep2026

Nifty Smart Beta Indices Review - August 2026 06Sep2026

Nifty Indices Broad Market and Sector Review – July 2026 02Aug2026

Inside the Nifty 500 Index: How It Changed from 2021 to 2026 28Jul2026

Nifty 500 Snapshot 30Jun2026

Nifty Valuation Tracker Series: June 2026 Update – Broad Market and Smart Beta Indices 04Jul2026

BSE 500 Versus Nifty 500: Same Market, Different Indices 02Jan2026 (NSE Indices / Nifty Indices) (BSE Indices)

The Hidden Rotation in Indian Markets: Capex Leads, Mid/Smallcaps Rise, Financials Lag 02May026 (NSE Indices, Nifty Indices, Nifty sector indices) (Capital goods sector very broad)

------------

The following analysis is based on the charts attached below.

1 Broad Market Performance

Two-year performance:

Indian equities have faced a prolonged period of stress. Since late end-Sep2024, the Nifty 500 has declined i per cent, significantly lagging most major global markets.

This weakness is now reflected in the numbers shown in the charts below: the Nifty 50 has delivered only 6.1 per cent CAGR over three years, despite the strong gains seen earlier in that period.

The recent correction is visible across the broad market. Most indices posted negative 1-month and 3-month returns. Nifty 50 was down 6.4 per cent over one month and 4.9 per cent over three months.

However, longer-term returns remain healthy, with Nifty 50 delivering 11.5 per cent CAGR over 10 years.

2 Broad market valuations

Valuations remain widely dispersed. Nifty 50 trades at 19.4 times earnings, while Midcap 150 and Smallcap 250 are much more expensive at 28.4 and 34.5 times respectively. Smallcap 250 also has a low dividend yield of just 0.61 per cent.

3 Sector performance

Sector performance has been mixed. Capital Goods, Healthcare, Metals and Telecommunications have delivered strong one-year returns. In contrast, IT, FMCG and Consumer Services have struggled.

The recent one-month correction, however, has been broad-based across almost all sectors.

4 Sector valuations

There is a wide valuation gap between sectors. Capital Goods and Healthcare command very high PE ratios of 44.2 and 42.0 respectively. Financial Services, Oil & Gas, Metals and Telecommunications appear relatively cheaper.

IT stands out with a relatively modest PE of 17.4 and the highest dividend yield among the top ten sectors at 2.89 per cent.

Nifty Healthcare climbed one place to third in the Nifty Total Market, from fourth a month ago. Nifty Auto slipped from third to fourth over the same period.

5 Overall

The data show a market that has corrected sharply in recent months, but valuations remain high in several midcap and sectoral pockets.

The contrast between recent returns and current valuations remains worth watching.

Charts numbered 3 to 6 (as given in the chart) >

all data as at end 30Sep2026 >

Chart 3 showing Nifty Broad Indices Trailing Returns >

Chart 4 showing Nifty Broad Indices Valuation Data >

Chart 5 showing Nifty Sector Indices Trailing Returns (Top 10 sectors by weight in Nifty Total Market index) >

Chart 6 showing Nifty Sectoral Indices Valuation Data (Top 10 sectors by weight in Nifty Total Market index) >

Past performance does not guarantee future returns. Please do your own research or consult a qualified financial adviser before making investment decisions.

- - -

------------------------------

References and Additional Notes:

Nifty Index factsheets

Nifty Total Market factsheet

Nifty 500 factsheet

Nifty Financial Services factsheet

Nifty Bank factsheet

Nifty Capital Goods factsheet

Nifty Healthcare factsheet

Nifty Auto factsheet

Nifty Oil & Gas factsheet

Nifty IT factsheet

Nifty FMCG factsheet

Nifty Metal factsheet

Nifty Consumer Services factsheet

Nifty Telecommunications factsheet

Nifty Power factsheet

Nifty Consumer Durables factsheet

NSE Index dashboard Sep2026

Nifty Return Profile

YTD returns / year to date returns (on a daily basis) can be obtained from (other data, like, absolute trailing returns index levels PE and PB ratios, Top 5 gainers, Top 5 losers, heatmap, index movers, all constituents, corporate actions, shareholding pattern, corporate results, factsheet, list of constitutent, methodology, setc, too are available): Index tracker of NSE Indices:

Nifty 50
Nifty Midcap 150

Nifty Financial Services

Nifty Bank

Nifty Capital Goods (NSE weblink not available for this sector)

Nifty Oil & Gas

Nifty Consumer Services (NSE weblink not available for this sector)

Nifty Telecommunications (NSE weblink not available for this sector)

Nifty Power (NSE weblink not available for this sector)

Nifty Consumer Durables

Nifty Sectoral Indices Calendar Year Returns: 2018 to 2026 (till 30Sep2026): Top 10 Sectors in Nifty Total Market Index > Click on the chart to view better >

Screenshot of Nifty Total Market (755 stocks) factsheet 30Sep2026 >

Nifty Valuation Tracker Series: September 2026 Update – Broad Market and Smart Beta Indices

2026-10-04T22:27:05.272+05:30

Nifty Valuation Tracker Series: September 2026 Update – Broad Market and Smart Beta Indices 04Oct2026

Follow @vrk100

(This is my 538th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

(Don't miss the P.S. Update 12Oct2026 at the end of the blog)

1 Introduction

Every investor wants to know whether the market is expensive or inexpensive. There is no perfect answer. However, comparing today's valuations with their own history provides a useful starting point.

This blog is the fourth part of the updated valuation framework for select NSE indices numbering six, building on earlier studies published:

1) On 21Apr2026 namely “How Valuations Shape Returns and Risk in Select NSE Indices,”

2) On 03May2026 namely “Valuation Changes in Broad Market and Smart Beta Nifty Indices," and

3) On 31May2026 namely "Nifty Valuation Tracker Series: May 2026 Update – Broad Market and Smart Beta Indices"

4) On 04Jul2026 namely "Nifty Valuation racker Series: June 2026 Update – Broad Market and Smart Beta Indices"

It is not a prediction of future market returns. It is simply a framework to understand where valuations stand today. This is not investment advice.

Note: The idea is to update this 23-quarter framework each quarter as new data become available. For example, inclusion of the Oct-Dec2026 quarter will extend the dataset to 24 quarters in the next update, maintaining a rolling historical reference.

(article continues below)

-------------------

Related blogs:

"Nifty Valuation Tracker Series: June 2026 Update – Broad Market and Smart Beta Indices" 04Jul2026

"Nifty Valuation Tracker Series: May 2026 Update – Broad Market and Smart Beta Indices" 31May2026

“Valuation Changes in Broad Market and Smart Beta Nifty Indices” 03May2026

“How Valuations Shape Returns and Risk in Select NSE Indices” 21Apr2026 ("Summary data" -- including raw data -- table of 21 quarters for period from Mar2021 to Mar2026 for each of the six NSE Indices discussed in the blog) (Nifty Valuation Tracker Series)

-------------------

2 Why valuations matter

Valuations tell us how much investors are willing to pay for a company's earnings or assets.

A valuation below the 25th percentile suggests that an index is relatively inexpensive compared with its own history. A valuation above the 75th percentile suggests that it is relatively expensive.

PE, PB and dividend yield should be viewed together. None of them, by itself, is a sufficient basis for an investment decision.

About this study:

This is the September 2026 update of my Nifty Valuation Tracker series. The study, similar to the previous studies, focuses on current valuation positioning within a historical range.

The analysis compares current levels (as of 30Sep2026) against a 23-quarter baseline from Mar2021 to Sep2026 across six Nifty indices. It looks at returns, volatility, PE, PB and dividend yield.

It uses percentile-based positioning of PE, PB and dividend yield to assess whether valuations are relatively rich or attractive across segments.

The analysis starts from Mar2021 because the method used to calculate Nifty 50 earnings per share changed at that point. Using only the newer data makes the historical comparisons consistent.

The study covers six selected Nifty indices, three broad and three "smart beta" indices. It is not a comprehensive study of the Indian equity market.

Indices covered are:

Nifty 50,
Nifty Midcap 150,
Nifty Smallcap 250,
Nifty 100 Low Volatility 30,
Nifty 200 Momentum 30, and
Nifty 200 Quality 30.

Charts showing Summary Return / Valuation data and current valuation (Sep2026) versus historical range (23 quarter data from Mar2021 to Jun2026) of six select Nifty indices >

Click on the charts to view better >

3 Broad Market Indices:

1. Nifty 50 Index

Nifty 50 looks the least expensive among the three broad-market indices.

Its current PE of 19.4 and PB of 2.8 are both at the minimum levels seen during the 23-quarter study period. Its dividend yield of 1.22 per cent is around the 25th percentile.

This makes the valuation picture for Nifty 50 much more comfortable than that for mid- and small-cap stocks.

But valuations are also a function of the market sentiment, which rightly or wrongly perceives Nifty 50 stocks having low growth opportunities compared to their smaller counterparts in India and foreign markets.

2. Nifty Midcap 150

Midcaps look reasonably valued, although not cheap. The current PE of 28.4 is below the historical median of 30.6. PB at 3.8 is also below the median of 4.1.

Dividend yield, at 0.71 per cent, is below the 25th percentile. Thus, on this framework, Midcap 150 does not look stretched in the way Smallcap 250 does.

3. Nifty Smallcap 250

Smallcaps continue to look expensive on some important measures.

PE at 34.5 is above the 75th percentile of 33.7. Dividend yield, at 0.61 per cent, is at the lowest level of the study period.

PB at 3.4 is below the historical median of 3.6, so the signals are mixed. Nevertheless, the high PE and very low dividend yield suggest caution.

4 "Smart Beta" Indices:

4. Nifty 100 Low Volatility 30

The index looks relatively attractive on valuation.

Its PE of 23.7 is below the 25th percentile. PB of 3.6 is at the minimum level of the study period. Dividend yield, at 1.26 per cent, is also below the 25th percentile.

The index also has the lowest historical median volatility among the six indices in this study, true to its label.

5. Nifty 200 Momentum 30

Momentum has become noticeably cheaper during the quarter.

Its current PE of 23.2 is below the historical median of 24.3. PB of 4.3 is at the median. Dividend yield of 0.86 per cent, however, remains below the 25th percentile.

Momentum has historically produced strong returns, but also carries relatively high volatility.

6. Nifty 200 Quality 30

Quality presents an interesting valuation picture.

Its current PE of 25.7, PB of 7.9 and dividend yield of 1.86 per cent are all below their respective 25th percentile levels.

On this historical framework, therefore, Quality looks relatively inexpensive.

5 Cross Index Valuation, Risk and Return (Median Values Only):

The historical data show that indices with higher median one-year returns have generally also experienced higher volatility.

The median one-year return during the study period (23 Quarters from Mar2021 to Sep2026) was 11.9 per cent for Nifty 50, compared with 24.5 per cent for Midcap 150 and 27.2 per cent for Smallcap 250.

Momentum also delivered a high median one-year return of 21.3 per cent.

But higher returns came with higher volatility. Median standard deviation was 13.6 per cent for Nifty 50, 17.1 per cent for Midcap 150, 18.4 per cent for Smallcap 250 and 19.2 per cent for Momentum.

True to its nature, Low Volatility 30 had the lowest median volatility at 12.0 per cent. Quality had a median return of 14.4 per cent with volatility of 13.6 per cent.

These are historical observations, not forecasts.

Chart 7 showing cross index valuation, risk and return (only median values) >

23 Quarters data from Mar2021 to Sep2026 >

6 What Changed During the Jul-Sep2026 Quarter?

PE and PB declined for all six indices between Jun2026 and Sep2026. Nifty 50 PE/PB fell 5.9 per cent/10.9 per cent, Midcap 150 by 2.6 per cent/19.9 per cent, while Momentum saw the sharpest fall at 12.8 per cent/15.9 per cent.

Chart 8 showing valuation changes in six Nifty indices between end-Jun2026 and end-Sep2026 >

Click on the chart to view better >

A paradox: An interesting divergence was seen in dividend yields. For Midcap 150 and Quality 30, PE and PB fell while dividend yield rose. But for Smallcap 250, Low Volatility 30 and Momentum 30, all three declined.

This is not necessarily contradictory. At index level, PE and PB can fall when earnings or book value grow faster than market value. Dividend yield, however, depends on dividends paid over the preceding 12 months relative to market value.

It can therefore fall if dividends decline or grow more slowly. Changes in index constituents and their weights can also influence all three measures.

This apparent paradox needs a more comprehensive analysis of index composition changes and dividend payouts of index constituents -- which is outside the scope of the current study.

7 PE and PB Contraction versus Index Returns

As shown in chart 9 below and discussed in Section 8 above, PE and PB fell across all six indices during Jul-Sep2026, indicating valuation de-rating.

Yet price declines were much smaller than the PE declines in Smallcap 250, Quality 30 and especially Momentum 30.

Momentum 30 stands out: its 12.8 per cent PE decline was cushioned by an 8.3 per cent implied earnings contribution.

From chart 9 below, the implied earning contribution is as follows:

Nifty 50: 0.71% [-5.2 - (-5.9)]

Nifty Midcap 150: -1.34%

Nifty Smallcap 250: 3.45%

Nifty 100 Low Volatility 30: -0.44%

Nifty 200 Momentum 30: 8.30%

Nifty 200 Quality 30: 3.70%

Interpretation:

As shown above, the implied earnings contribution is small / negligible for Nifty 50, Midcap 150 and Low Volatility 30 indices; but very high for Momentum 30 index.

How does one interpret this?

For Momentum 30, the index price fell only 4.5 per cent despite a much larger 12.8 per cent fall in PE. The 8.3 per cent gap suggests that strong growth in the earnings base substantially cushioned the PE de-rating.

In contrast, for three indices, namely Nifty 50, Midcap 150 and Low Volatility 30, there was little earnings offset to the valuation de-rating.

The striking message is: During Jul-Sep2026, the sharp PE de-rating in Momentum 30 was substantially cushioned by strong growth in trailing earnings -- as such, price index change was lower at 4.5 per cent versus PE de-rating of 12.8 per cent.

This contrasts with Nifty 50 and Low Volatility 30, where the decline in PE broadly explains the decline in prices.

(Check additional notes below for a note on implied earnings contribution)

Why price index, not TRI?

The analysis in Chart 9 below compares changes in index price with changes in PE and PB.

Index PE is based on market capitalisation, which moves with the price index rather than dividends.

TRI includes dividends, so price index change gives a cleaner comparison with PE/PB changes.

Chart 9 Showing PE and PB Contraction versus Index Returns for six indices between end-Jun2026 and end-Sep2026 >

8 Shortcomings

This analysis has certain limitations.

It covers only six selected Nifty indices. It does not fully represent the Indian stock market though it fairly captures large part of the market.

The analysis uses only end-quarter data. It does not capture valuation changes or market movements that occurred during the quarter.

The Jun2026 to Sep2026 comparison therefore shows the change between two quarter-end points, rather than the path followed during Jul-Sep2026.

The historical period is limited to 23 quarters because of the change in Nifty 50 earnings calculations since Mar2021.

The study focuses only on valuations. It does not consider earnings growth, interest rates, liquidity, macroeconomic conditions or investor sentiment.

9 What stands out in Sep2026?

The Sep2026 data show a meaningful divergence across Nifty indices. Nifty 50 appears relatively inexpensive compared with its recent history, while Midcap 150 looks reasonably valued.

Smallcap 250 remains expensive on PE and has an exceptionally low dividend yield.

Among the smart beta indices, Low Volatility 30 and Quality 30 look attractive on this valuation framework. Momentum has also become considerably cheaper compared with Jun2026.

Valuation should be treated as one input into investment decisions, rather than as a market-timing tool.

The Nifty Valuation Tracker will be updated again with the next quarterly data.

Check below for references and additional notes.

- - -

-------------------

P.S.: Update dated 12Oct2026: This is added on 12Oct2026 after the above blog was published on 04Oct2026.

PE Expansion and Price Changes in Top Nifty 50 Constituents: (30Jun2026 – 30Sep2026):

Background: The earlier analysis of six NSE / Nifty indices highlighted how PE expansion, PB movement and price changes differed across market segments / indices during the Jul-Sep2026 quarter.

This stock-level analysis of major Nifty 50 components extends that framework further by showing how earnings updates and valuation changes within heavyweight companies are shaping aggregate index behaviour during the ongoing results season.

Chart showing Top 15 Stocks, by weight, in Nifty 50 as of 30Sep2026: PE Contracion Versus Price Declines: Observation period: 30Jun2026 – 30Sep2026

Rank > Stock > Implied earnings contribution:

1 HDFC Bank 3.2%

2 ICICI Bank 3.1%

3 Reliance Inds -3.9%

4 Bharti Airtel 5.5%

5 L&T 6.2%

6 SBI 0.8%

7 Axis Bank. 4.5%

8 Infosys 3.4%

9 Kotak Mahindra Bank 5.4%

10 Mahindra & Mahindra 7.5%

11 Bajaj Finance 5.9%

12 ITC Ltd -5.3%

13 Eternal Ltd 18.7%

14 TCS 2.6%

15 Sun Pharma 1.2%

Key insights from the above chart:

1. The top 15 stocks account for 63.3% of the Nifty 50 by weight, making them a reasonable sample for understanding the index's underlying valuation and earnings dynamics.

2. The Nifty 50's aggregate implied earnings contribution was relatively modest at 0.71% for July–September 2026 (see Section 7 above), despite a 5.2% price decline and a 5.9% PE contraction. The aggregate picture masks considerable variation among individual stocks.

3. PE contraction was widespread among the major constituents. This suggests that valuation multiples, rather than implied earnings deterioration alone, played a significant role in the quarter's price weakness.

4. Positive implied earnings contributions coexisted with falling share prices in several stocks. This indicates that earnings strength did not necessarily translate into positive price returns when investors were willing to pay lower valuation multiples.

5. M&M was a clear example of this divergence: its implied earnings contribution was 7.5%, while its PE contracted 11.4% and its price fell 3.9%. Earnings contribution and valuation change can move in opposite directions.

6. Larsen & Toubro also showed a substantial divergence, with a 6.2% implied earnings contribution alongside a 15.5% PE contraction and a 9.3% price decline. Strong implied earnings contribution alone did not prevent a meaningful fall in its share price.

7. Bharti Airtel and Bajaj Finance displayed a similar pattern. Their implied earnings contributions were 5.5% and 5.9%, respectively, while both experienced PE contraction and negative price returns.

8. Eternal was the outlier, with an implied earnings contribution of 18.7%, a price gain of 20.9% and PE expansion of 2.2%. Unlike stocks where earnings contribution was offset by de-rating, both earnings and valuation movements supported its price performance.

9. Not all stocks benefited from positive implied earnings contributions. Reliance Industries and ITC recorded negative contributions of -3.9% and -5.3%, respectively, indicating that their price declines were accompanied by implied earnings deterioration rather than being explained by PE contraction alone.

10. Financial stocks showed meaningful differences despite belonging to the same broad sector. HDFC Bank, ICICI Bank, SBI, Axis Bank and Bajaj Finance experienced PE contraction, while Kotak Mahindra Bank was the exception, recording PE expansion and a positive price return.

11. The quarter’s price movement reflected two factors: changes in implied earnings and changes in PE multiples. This helps show where earnings strength cushioned price declines and where earnings weakness added to them. Remember, implied earnings contributions are estimates, not actual reported earnings growth.

12. Stock potential depends more on future earnings growth and the ability to exceed market expectations than on past earnings contributions.The figures analysed here are backward-looking indicators, not forecasts of future returns.

13. Market sentiment and liquidity matter too. More money chasing a stock can drive PE expansion and returns, while weakening sentiment can trigger de-rating despite earnings growth.

-------------------

Additional data:

1) Note on implied earnings contribution:

In the investment industry, it is a standard practice to use phrases, like, earnings growth, earnings contribution, or fundamental contribution.

To be on the safer side, the author has used the term 'implied earnings contribution,' since it is inferred from index return and valuation changes rather than measured directly from reported earnings.

In practice, these terms generally convey the same underlying idea: the portion of return attributable to growth in earnings rather than changes in valuation multiples.

To put simply, at the market index level:

Price Return ≈ Earnings Growth + Multiple Expansion

At the stock level:

Price Return ≈ EPS Growth + Multiple Expansion

One could also say:

Earnings Component ≈ Price Return − Multiple Expansion.

2) Data note: The valuation measures come from Nifty Indices. PE, PB and dividend yield may not update at the same frequency, because each depends on different underlying data.

The author's best guess is:

PE ratios update more often, because NSE India / Nifty Indices appear to refresh EPS as companies declare quarterly and annual results.

In contrast, PB ratios update less often, because book value is reported half-yearly and yearly, not every quarter for all listed companies in India. It's possible NSE India may be updating book values based on published fiscal year (annual reports) data.

Dividend yield updates with price daily and with the declared dividend when companies announce it, so its rhythm differs again.

3) Index rebalancing frequency is as follows:

It is semi annual (March and September) for:

Nifty 50,
Nifty Midcap 150, and
Nifty Smallcap 250,

For, Nifty 100 Low Volatility 30, it is quarterly (March, June, September, December).

For Nifty 200 Momentum 30 index, it is semi annual (June, December).

For Nifty 200 Quality 30 too, it's semi annual (June, December).

Notes on index weighting:

Nifty 100 Low Volatility 30 index's 'score' weighting is based on inverse of stock's volatility (standard deviation).

Nifty 200 Momentum 30 index's 'tilt' weighting is calculated as stock free float market cap multiplied by its momentum score.

Nifty 200 Quality 30 index's 'tilt' weighting is computed as stock free float market cap multiplied by its quality score.

Chart showing Index Characteristics of six Nifty indices >

-------------------

References:

Tweet 22Apr2026 Bizarre spike in valuation ratios (PE, PB and dividend yield) of Nifty 200 Momentum 30 index on 31Dec2024 vs previous day)

Tweet 03Jun2021 - Nifty 50 PE calculation method change wef 31Mar2021

Tweet 01May2024 - Don't compare Nifty PE ratios on or after 31Mar2021 with those in prior periods

Tweet 07Jul2024 - NSE press release on change in Nifty 50 PE calculation method (NSE press release dated 23Feb2021 -- EPS used in PE calcualtion was based on standalone finanacials; from Mar2021, it is based on consolidated basis)

Screenshot of the above >

Nifty Return Profile

Nifty Indices factsheets

Nifty 50
Nifty Midcap 150
Nifty Smallcap 250
Nifty 100 Low Volatility 30
Nifty 200 Momentum 30
Nifty 200 Quality 30

NSE Index Dashboard monthly - PDF for Sep2026

NSE Live Analysis - NSE Index performance daily - showing index values and valuation ratios of all Nifty Indices / NSE Indices on a daily basis

NSE Historical Index yield - Find out daily valuation ratios (PB, PE and dividend yield) of all Nifty indices / NSE indices (dropdown menu)

NSE Market Watch - all indices

Nifty Indices Index Methodology - Jun2026 PDF for equity indices

NSE India - PE Ratio definition / calculation method

Excel file: NSE Indices Valuation 30Sep26

-------------------

Read more on passive equity funds and factor investing:

Top 10 Equity Indices Powering Passive Investing in India: Big-Picture View 29Jan2026 (Big picture view of Passive Equity Funds - passive funds)

The Next Generation of Market Leaders: A Fresh Look at Nifty Next 50's Corporate Landscape 15Jan2026 (NSE Indices / Nifty Indices)

NSE's Backtesting Claims Child Indices Beat Parent Indices - But Does It Hold in Real World? 09Dec2025 (incl calendar year returns of Nifty 50, Nifty Midcap 150 and the so-called smart beta indices) (NSE Indices / Nifty Indices)

Factor Investing in India: Do "Smart Beta" Indices Outsmart Nifty 50 and Midcap 150? 24Nov2025 (incl trailing returns; calendar year returns of Nifty 50, Nifty Midcap 150 and the so-called smart beta indices) (NSE Indices / Nifty Indices)

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Nifty High Dividend Yield 15 Index: A Dividend Basket Dominated by PSUs 01Oct2026

2026-10-01T22:39:42.809+05:30

Nifty High Dividend Yield 15 Index: A Dividend Basket Dominated by PSUs 01Oct2026

Follow @vrk100

(This is my 537th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

The article is about Nifty High Dividend Yield Index, introduced by NSE Indices Ltd, a subsidiary of India's premier exchange, NSE India on 30Sep2026.

NSE lists the index as a Strategy index.

The newly-launched and dividend-focused index tracks 15 companies from the Nifty Total Market selected using dividend yield scores.

How the Index Works

The index uses trailing 12-month dividends relative to market capitalisation to determine dividend yield scores. Weights combine the dividend yield score with free-float market capitalisation, with each stock capped at 10 per cent.

The index will be rebalanced twice a year, in June and December.

Chart 1 showing Stock-wise List and Weights >

A Strong PSU Presence

The index has a notable PSU presence. Seven of its 15 constituents are PSUs (public sector undertakings, including one public sector bank), accounting for 63.7 per cent of the index.

The largest holdings include BPCL, TCS, Indian Oil, ONGC and Coal India, with several constituents close to the 10 per cent individual-stock cap.

The top five stocks account for more than 50 per cent of the index, while the top ten account for 90 per cent. Thus, despite having 15 constituents, the index is substantially concentrated in a relatively small number of companies and sectors.

Potential investors need to consider this high concentration risk before making any investments.

A Quirky Inclusion

JSW Dulux is an interesting and quirky example of the limitations of a purely mechanical dividend strategy. The company entered the index with a substantial recent dividend history inherited from its earlier avatar as Akzo Nobel India, including a Rs 156 special dividend in Aug2025.

But following the change in control to JSW group, its future dividend policy could be different. Since the Nifty High Dividend Yield 15 uses trailing 12-month dividends rather than forecasts of future payouts, the stock can qualify today even if its high dividend yield proves temporary.

If dividends moderate, the stock's trailing yield—and consequently its place in the index—could change at a future review.

Heavy Sector Concentration

The concentration is even clearer at the sector level. oil & gas sector accounts for 44.3 per cent, information technology (IT) for 26.9 per cent and financial services for 15.3 per cent. Together, these three sectors make up 86.5 per cent of the index.

It may be noted that the oil & gas sector is particularly sensitive to geopolitical developments and global energy prices, as illustrated by the adverse impact of the recent Iran war on the Indian economy.

Chart 2 showing Sector wise concentration >

What It Means for Investors

Concentration risk: For investors, the key point is that high dividend yield does not eliminate equity risk. The new index provides a systematic dividend-focused basket, but its substantial PSU, sector and company concentration is an important feature to understand alongside its dividend focus.

In short, any passive exposure to such indices with high concentration risk may not be suitable for most investors. As the index was introduced only yesterday, the chances of any passive funds being launched in the next few months based on the index are slim.

- - -

------------------------

References:

Press release on index introduction

Nifty Indices Research Papers

Nifty Indices methodology document PDF

Nifty Indices factsheets

Nifty High Dividend Yield 15 Index

Nifty High Dividend Yield 15 factsheet PDF

NSE Index Dashboard - Sep2026 PDF

Inside the Nifty 500 Index: How It Changed from 2021 to 2026 28Jul2026

Additional data:

Screenshot of Nifty High Dividend Yield 15 Index factsheet PDF for Sep2026 >

Is the Midcap-Smallcap Rally Really Broad-Based? 17Sep2026

2026-09-17T10:39:56.112+05:30

Is the Midcap-Smallcap Rally Really Broad-Based? 17Sep2026

Follow @vrk100

(This is my 536th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

The Nifty MidSmallcap 400 Index, a representative index of India's mid- and small-cap stocks, has risen 14.2 per cent over the past six months. But how much of that gain is actually being shared across its 400 constituents?

This is an attempt to look beneath the index and develop a simple, repeatable way to track whether participation is broadening or narrowing over time.

1) Why Look Beneath the Index?

As of yesterday, the Nifty MidSmallcap 400 delivered 14.2 per cent over the past six months, beating substantially the large-cap oriented Nifty 50 index. But an index can sometimes give a misleading picture of what is happening to the average stock.

I wanted a simple way to answer a basic question: is the market moving broadly, or is the index being lifted by a relatively small group of stocks?

Rather than trying to construct an equal-weight index, I decided to track a few simple measures of market breadth and dispersion over time.

(article continues below)

--------------------------

Related blogs:

Nifty Indices Broad Market and Sector Review – August 2026 06Sep2026

Tweet thread 31Jul2025 on Nifty Internals (relative riskiness of three Nifty Indices)

Tweet thread 03Mar2025 Nifty Indices Internals

Tweet thread 03Jan2025 on Nifty Internals

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2) The Average Stock Has Done Less Well Than the Index

The six-month return of the MidSmallcap 400 index is 14.2 per cent. The median return, over the past six months, of its 400 constituents is just 9.6 per cent.

In other words, the index has done 4.6 percentage points better than the typical stock.

(Note: The index itself is also relatively diversified: only eight stocks have a weight of more than 1 per cent, while the top 10 stocks together account for just 12.1 per cent, as of 31Aug2026. So, the gap between the index and median stock is less likely to be explained simply by a handful of very large constituents.)

This does not necessarily mean that the market is narrowly driven. But it tells us that the index's 14.2 per cent return is not representative of the experience of the median constituent.

Six months vs one year:

The median stock is up 9.6 per cent over six months versus down 8.3 per cent over one year, pointing to a recent recovery.

The index–median gap is 10.9 percentage points over one year, compared with 4.6 percentage points over six months, indicating some improvement in the median stock performance in the past six months period.

Chart showing Nifty MidSmallcap 400 Index versus Median Stock Return >

3) How Many Stocks Are Actually Going Up?

A more intuitive measure is positive breadth: what percentage of the 400 stocks have delivered a positive return over six months?

As of 16Sep2026, 259 stocks, or 64.8 per cent, were in positive territory. The remaining 141 stocks, or 35.2 per cent, had negative returns.

So nearly two-thirds of the stocks have risen over the past six months. That suggests that the market's advance is reaching a reasonably broad part of the universe, rather than being confined to a handful of stocks.

The 64.8 per cent reading is our starting point. The more useful question is how this number changes over time.

A rise in this number, in future, would indicate that participation is broadening, while a decline would indicate that participation is narrowing. Tracking the measure over time should make these changes easier to identify.

4) Percentage beating the index

How Many Stocks Have Actually Outperformed the Index?

Over the past six months, 172 of the 400 stocks or 43 per cent have outperformed the index, which has returned 14.2 per cent.

5) The Winners and Losers Are Far Apart

There is another interesting feature of the market: the wide gap between winners and losers.

Chart showing Nifty MidSmallcap 400 Index Return Distribution over the past six months >

The top 10 per cent of stocks had six-month returns of 48.4 per cent or more, while the bottom 10 per cent had returns of -11.6 per cent or less. That is a 60 [(48.4) - (-11.4)] percentage-point gap between the two ends of the market.

This gap is a simple measure of dispersion: how differently stocks are behaving from one another. If it narrows over time, stocks are performing more similarly; if it widens, the divergence between winners and losers is increasing.

For now, the 60-point gap (90th–10th percentile gap) tells us that, despite reasonably broad participation, there is considerable divergence beneath the index.

The 90th–10th percentile spread is a broad indicator of how differently the stocks are performing in an index.

6) What to Track Going Forward

For the Nifty MidSmallcap 400, analysing the following four measures using six-month returns (updated monthly or quarterly) will be a simple and useful framework to assess whether the participation is broadening or narrowing.

A) Index versus median return: currently a 4.6 percentage-point gap (index return higher than the median stock return) exists based on the past six months return.

B) Positive breadth: currently 64.8 per cent of stocks have positive six-month returns.

C) Percentage beating the index: Check how many stocks are outperforming the 14.2 per cent index return. At present, 43 per cent of the stocks have outperformed the index over the past six months.

D) 90th–10th percentile gap: as per the latest data, 60 percentage points, measuring the spread between winners and losers.

Together, these capture how representative the index is, how widespread the gains are, and how widely stock performance is diverging. The aim is to build a history over the next one or two years and see how these measures change over time.

7) Summary of our current study

As of 16Sep2026, the picture is mixed. The Nifty MidSmallcap 400 is up 14.2 per cent over six months, with 64.8 per cent of its stocks in positive territory, suggesting reasonably broad participation.

But the index is 4.6 percentage points ahead of the median stock, while the 90th–10th percentile gap is 60 percentage points, pointing to considerable divergence beneath the surface.

- - -

------------------------

References:

Nifty Indices Nifty MidSmallcap 400 index

Nifty MidSmallcap 400 - factsheet PDF Aug2026

Nifty Indices Research Papers

Nifty Indices methodology document PDF

Additional data:

1) Passive funds tracking the Nifty MidSmallcap 400 Index >

As of now, there is only one passive fund tracking the index, namely,

Navi Nifty MidSmallcap 400 Index Fund - its top stocks as of 31Aug2026 >

2) Nifty 100 Index is basically, a large cap index. Suppose you want to check whether the market breadth or participation of the stocks in the index is wide or narrow, you can check the returns of the Nifty 100 index versus Nifty 100 Equal Weight index.

Over a one-year period, the Nifty 100 is down 5.3 per cent, while the Nifty 100 Equal Weight index is up 0.8 per cent, suggesting that the weakness in the large-cap index has been concentrated in some of its larger constituents by weight.

This divergent performance indicates that participation across the 100 constituents has been considerably better than the headline, market cap-weighted index suggests.

3) Nifty MidSmallcap 400 index factsheet for Aug2026 >

4) Nifty internals (relative riskiness of Nifty Indices) >

Tweet thread 01Apr2026 >

Graph showing Nifty internals of Nifty 50, Nifty Next 50 and Nifty MidSmallcap 400 indices > data as of 31Mar2026 >

Nifty 500 Growth 50: A Beginner’s Guide to the Newly Launched Index 13Sep2026

2026-09-13T20:35:53.486+05:30

Nifty 500 Growth 50: A Beginner’s Guide to the Newly Launched Index 13Sep2026

Follow @vrk100

(This is my 535th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

The article is about Nifty 500 Growth 50 Index, introduced by India's premier exchange, NSE India on 26Aug2026. NSE lists the index as a Strategy index.

1) Introduction and Importance

The Nifty 500 Growth 50 is a new index from NSE Indices Ltd that tracks 50 companies from the Nifty 500 Index showing strong growth. It considers their profit growth, sales growth and stock return performance while selecting companies.

The index gives investors a simple way to follow a basket of growth-focused companies and could also become the basis for products such as exchange traded funds or ETFs and index funds.

(article continues below)

--------------------------

Related blogs:

Nifty Indices Broad Market and Sector Review – August 2026 06Sep2026

Nifty Smart Beta Indices Review - August 2026 06Sep2026

Nifty Indices Broad Market and Sector Review – July 2026 02Aug2026

Inside the Nifty 500 Index: How It Changed from 2021 to 2026 28Jul2026

Nifty 500 Snapshot 30Jun2026

A Simple Guide to the Nifty India FPI 150 Index 04May2026

BSE 500 Versus Nifty 500: Same Market, Different Indices 02Jan2026 (NSE Indices / Nifty Indices) (BSE Indices)

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2) How exactly NSE selects these 50 growth stocks?

So how did NSE arrive at these 50 companies?

All the 50 stocks are drawn from the broader Nifty 500 Index.

NSE looked at three measures for every eligible stock:

> three-year profit growth,

> three-year sales growth, and

> one-year risk-adjusted stock performance

And, NSE then combined them into an overall growth score. The companies with the strongest scores made the cut, subject to rules on liquidity, stock and sector weights.

For investors, the index can therefore be a useful starting point to discover interesting companies and sectors, rather than a portfolio to blindly copy — especially since its concentrated nature can make it relatively risky for novice investors.

3) Index's Portfolio Characteristics

Methodology: Tilt weighted

Tilt weighted means the weights are influenced not just by a company’s size but also by its growth score. Companies with stronger growth scores can receive a higher weight, while stock and sector caps prevent any one company or sector from becoming too dominant.

Each stock’s weight is derived by multiplying its free-float market capitalisation by its growth score. It then applies a 5 per cent stock cap and a 30 per cent sector cap.

No. of Stocks: 50

Index launch Date: 26Aug2026

Index base Date: 01Apr2005

Base Value: 1000

Calculation Frequency: End of day

Index Rebalancing: Half yearly (June, December)

At present, there are no passive funds such as exchange traded funds (ETFs) or index funds tracking this index.

4) Fundamentals, risk and return ratios

All the data are as of 31Aug2026.

PE ratio: 42.9

PB ratio: 8.8

Dividend yield: 0.23

Total returns (these are theoretical / back tested returns, readers should not interpret them as an indication of future performance):

YTD: 10.7%

1-year: 17.1%

5-year: 17.5

Standard deviation:

1-year: 20.6%

5-year: 20.1%

5) How does it compare with its parent index Nifty 500?

The Nifty 500 Growth 50 is quite different from its broader parent, the Nifty 500.

While financial services dominates both, the Nifty 500 Growth 50 has a much higher allocation to capital goods at 28.9 per cent.

Its top holdings are also different, with growth-oriented names such as Dixon Technologies, MCX, Nykaa and Trent featuring prominently.

The Growth 50 trades at a much higher PE of 42.9 versus 22.7 for the Nifty 500, and a PB of 8.8 versus 3.3.

The child index's dividend yield is also much lower at 0.23 per cent, compared with 0.95 per cent for the parent index.

This suggests investors are paying a significant premium for the growth potential of its companies in the Growth 50 Index.

For investors, the Growth 50 Index is therefore more concentrated and growth-focused, with potentially higher returns but also higher valuation and concentration risks.

The higher valuation for Growth 50 indicates that a significant part of the expected growth may have already been priced into these stocks. In my view, this leaves less room for error should future growth falls short of market expectations.

Even volatility, as represented by standard deviation, for the Nifty 500 Growth 50 is much higher versus the parent index, indicating the riskier nature of the index.

6) Sector Allocation and Top Stocks:

Capital goods, financial services and consumer services stocks dominate the index.

Chart showing top 10 sectors and top 10 stocks in the index >

Sectors:

The biggest thing to note is the index’s sector concentration: Capital Goods and Financial Services together make up 56.6 per cent, while the top five sectors account for 81.2 per cent.

This makes the index more sensitive to developments in a few key parts of the economy than the broader Nifty 500.

For small investors, this concentration can increase risk if sectors such as Capital Goods or Financial Services face a prolonged slowdown.

However, the concentration is also a result of the index’s focus on companies with stronger growth characteristics.

Stocks:

The top 10 stocks also show how strongly the index leans towards growth-oriented companies, rather than simply the largest companies in the market.

Dixon Technologies has the highest weight at 6.1 per cent, followed by MCX at 5.7 per cent and FSN E-Commerce (Nykaa) at 5.5 per cent.

Jio Financial Services, Cummins India and GE Vernova T&D India are the other stocks with weights above 4 per cent.

The top 10 stocks account for 47.5 per cent of the index, highlighting concentration risk.

The full list of 50 stocks is provided at the end of the article.

7) Action button

The Nifty 500 Growth 50 is an interesting new lens through which to look at Indian equities. Its methodology brings together companies showing strong profit and sales growth, but the resulting portfolio is concentrated and commands a significant valuation premium over the Nifty 500.

For individual investors, its biggest value may therefore be as a starting point for research — a way to discover companies and sectors that merit a closer look, rather than a ready-made list of stocks to buy.

- - -

------------------------

References:

Press release on index introduction

Nifty Indices Research Papers

Nifty Indices methodology document PDF

Nifty Indices factsheets

Nifty 500 Growth 50 Index

Nifty 500 Growth 50 factsheet PDF

NSE Index Dashboard - Aug2026 PDF

Inside the Nifty 500 Index: How It Changed from 2021 to 2026 28Jul2026

Additional data:

1) Screenshot of Nifty 500 Growth 50 Index factsheet PDF for Aug2026 >

2) Sector wise list of all the 50 stocks in Nifty 500 Growth 50 Index >

3) Interestingly, on 11Sep2026, NSE Indices Ltd another index, named, Nifty AI Catalysts Index:

It's amazing Nifty Indices could find so many stocks that are alleged to power AI (artificial intelligence) sector in India! 😂😍

press release

Index factsheet

Industry wise / sector wise list of 48 stocks that form part of the index as of 11Sep2026 >

Nifty Indices Broad Market and Sector Review – August 2026

2026-09-06T20:30:12.392+05:30

Nifty Indices Broad Market and Sector Review – August 2026: Nifty Indices Performance and Valuation at a glance 06Sep2026

Follow @vrk100

(This is my 534th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

This periodic snapshot brings together the latest performance and valuation data, as of 31Aug2026, for the broad Nifty indices and the major market sectors.

The aim is to understand what the numbers are saying today. It is not to predict what will happen next.

The data in this article are as on 31Aug2026, unless otherwise stated.

This article builds on an earlier article (with data as of 31Jul2026). Please check it if you're interested.

(article continues below)

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Related blogs:

Nifty Smart Beta Indices Review - August 2026 06Sep2026

Nifty Indices Broad Market and Sector Review – July 2026 02Aug2026

Inside the Nifty 500 Index: How It Changed from 2021 to 2026 28Jul2026

Nifty 500 Snapshot 30Jun2026

Nifty Valuation Tracker Series: June 2026 Update – Broad Market and Smart Beta Indices 04Jul2026

BSE 500 Versus Nifty 500: Same Market, Different Indices 02Jan2026 (NSE Indices / Nifty Indices) (BSE Indices)

The Hidden Rotation in Indian Markets: Capex Leads, Mid/Smallcaps Rise, Financials Lag 02May026 (NSE Indices, Nifty Indices, Nifty sector indices) (Capital goods sector very broad)

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1 Broad Market Performance

Chart showing Nifty Broad Indices Trailing Returns >

The broad market delivered mixed results over different time periods.

During the last one month, Nifty Smallcap 250 was the strongest performer with a return of 5.5 per cent. Nifty Smallcap 250 also posted a healthy gain of 2.6 per cent.

Looking at the past three months, 1-year, 5-year and 10-year, Nifty Microcap 250 is the strongest performer of all broad market indices.

On a 3-year basis, Nifty Next 50 provides the highest returns, closely followed by Nifty Microcap 250 index.

The long-term picture continues to be encouraging. Over three, five and ten years, every broad market index has delivered positive annualised returns, though Nifty 50 has been the weakest of them.

One important lesson is that market leadership keeps changing. The best-performing index over one year may not remain the best over longer periods.

2 Broad market valuations

Chart showing Nifty Broad Indices Valuation Data >

It's better for investors to look at trailing returns in conjunction with valuations.

Among the broad indices, Nifty Next 50 has the lowest PE ratio at 19.5. Nifty 50 is close behind at 20.4 and it also offers the highest dividend yield of 1.17 per cent.

Nifty Smallcap 250 index has the highest PE ratio, while Nifty Microcap 250 offers the lowest dividend yield.

It's apparent larger companies are more reasonably valued than smaller companies based on current market prices.

3 Sector performance

The sector analysis covers the top 10 sectors by weight in the Nifty Total Market Index as of the latest available data. The sector weights are shown in the table below.

The largest sectors by market weight provide a useful view of where market value is concentrated and how different parts of the market are performing.

Chart showing Top 10 Nifty Sectors by Weight in Nifty Total Market Index – Trailing Returns Performance >

As shown in the above chart, the top 10 sectors in Nifty Total Market index have a representation of 82.9 per cent in it.

Sector performance often changes much faster than broad market performance.

On a 3-year and 5-year basis, auto and capital goods have been the best performers among sector indices.

Telecommunications and Metals have delivered an impressive recovery over the past year.

Financial Services remains the largest sector in the market. Its long-term returns have been steady rather than spectacular.

Healthcare has remained resilient across most time periods.

Not every sector has performed well recently. FMCG, Oil & Gas and IT have recorded weaker one-year returns.

Surprisingly, Nifty Consumer Services delivered a strong 3-month return of 16 per cent.

As is known globally, sector performance is cyclical as market participants undertake sector rotation quite often.

(check References and Additional Notes at the end of the blog for calendar year returns of Nifty Sector Indices for years 2018 to 2025)

4 Sector valuations

Chart showing Top 10 Nifty Sectors by Weight in Nifty Total Market Index – Valuations >

Sector valuations show where investor expectations are highest.

Financial Services has one of the lowest PE ratios at 16.1. Oil and Gas also trades at a relatively low PE of 11.0.

At the other end of the spectrum, Capital Goods and Healthcare trade at PE ratios above 44. Investors appear willing to pay a premium for their expected future growth.

Dividend yields also differ across sectors.

IT and Oil and Gas offer the highest dividend yields among the major sectors.

Consumer Services offers the lowest dividend yield.

High valuations do not automatically mean a sector is overvalued. Likewise, low valuations do not guarantee better future returns. Valuations simply reflect what the market currently expects.

5 Summary

Markets are dynamic. Every month / quarter brings new winners, new laggards and changing valuations.

That is why it is useful to review the data regularly instead of relying on headlines or short-term market moves.

The purpose of this periodic review is to provide a simple, data-based view of the market. Over time, these updates will also help readers see how trends evolve across market cycles.

This article is meant purely for educational purposes. It is not investment advice or a recommendation to buy or sell any security, index or mutual fund.

Past performance does not guarantee future returns. Please do your own research or consult a qualified financial adviser before making investment decisions.

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References and Additional Notes:

Nifty 500 factsheet

NSE Index dashboard Aug2026

Nifty Return Profile

Nifty Index factsheets

Nifty Sectoral Indices Calendar Year Returns: 2018 to 2025: Top 10 Sectors in Nifty Total Market Index > Click on the chart to view better >

Screenshot of Nifty Total Market (750 stocks) factsheet 31Aug2026 >

Nifty Smart Beta Indices Review – August 2026

2026-09-06T10:01:11.133+05:30

Nifty Smart Beta Indices Review – August 2026: Nifty Smart Beta Indices Performance and Valuation at a glance 06Sep2026

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(This is my 533rd blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

This is a follow-up to my November 2025 article on factor investing and smart beta indices in India. This monthly review tracks how selected Nifty Smart Beta indices are performing against the Nifty 50 and Nifty Midcap 150.