A bull-market illusion? Handful of stocks driving the surge, data reveals

Business Standard

20-05-2025

The ongoing rally in benchmark indices has not lifted all boats, as only a handful of stocks have recovered to their levels at last year's market peak.
While the Nifty 50 index is currently less than 5 per cent below its high and has recovered 14 per cent from its recent low of 21,750 levels, 41 stocks (82 per cent), are still below their closing prices when the index hit its peak on September 27, data shows.
In the broader markets, too, over 72 per cent of the NSE 500 stocks are still trading below their closing prices from September 27. Additionally, one in four stocks, or 28 per cent, remain lower by more than 20 per cent from those closing levels, according to data compiled by Business Standard.
Among the top 750 listed companies, analysts at SAMCO Securities said, stocks of only 30-35 companies have driven the recent rally, highlighting that the reality is this "isn't a bull market - it's more like a bull mirage."
The index may flirt with 25,000, but most stocks are still nursing their wounds, it said in a recent note. "This isn't a rotation - it's a massacre disguised as a milestone," wrote Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities, in a recent note.
Within the NSE 500 pack, Sterling and Wilson Renewable (down 54 per cent), Adani Green Energy (down 51 per cent), Ola Electric Mobility (down 49 per cent), BrainBees Solutions (down 46 per cent) and IndusInd Bank (down 46 per cent) are the top losers since the market closing on September 26. They are yet to hit their peak levels hit late last year.
Transformers & Rectifiers (up 67 per cent), BSE (98 per cent), and JSW Holdings (156 per cent) are top gainers along with defence public sector undertakings (PSUs) like Mazagon Dock Shipbuilders (61 per cent), Garden Reach Shipbuilders (45 per cent) and Bharat Dynamics (62 per cent).
Momentum still prevails
However, market experts are of the view that, while the rally may be led by few heavyweights, the bullish momentum still prevails from a long-term viewpoint.
Indian equity market is showing clear signs of bullish momentum, according to Chandan Taparia, head of derivatives and technicals, wealth management at Motilal Oswal Financial Services (MOFSL). He points to a sharp recovery of over 3,000 points from recent lows in the Nifty index, which is trading above its 50-day exponential moving average (EMA).
This is a key technical signal that the market is gaining strength, Taparia said, adding, 'This kind of recovery doesn't happen in a bear market.'
Taparia noted that the current rally has been led by selective sectors, particularly banking and heavyweight counters like Reliance Industries (RIL). The Bank Nifty has surged to record highs, contributing significantly to the market's gains, he added.
He also highlighted the sustained Systematic Investment Plan (SIPs) inflows and aggressive buying by both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs). 'The FIIs' long-short ratio has turned positive and SIP flows are at record highs, which underpins the bullish sentiment,' he said.
While the market has been range-bound between 22,000 and 26,000 for several months, Taparia believes sector rotation, from defence and banking to metals and IT, will broaden the rally. We're in a phase where selective buying is driving the index, and broader participation will follow, he said.