A Look at Market Performance
The Nifty Top 10 Equal Weight Total Returns Index and the Nifty 500 Index show a very interesting picture when we compare their long-term performance. Over the last 20 years, the Top 10 Equal Weight Index has given much stronger results than the broad market.
This tells us that the biggest listed companies in India, when given equal weight, have shown solid strength over time.
Understanding the Rolling Return Trend
A key part of the chart shows the rolling 2-year alpha of the Top 10 Equal Weight Index versus the Nifty 500. This alpha line moves between minus 10 and plus 30 over time. For nearly one to one and a half years, the alpha stayed in negative territory. This means the Top 10 stocks were underperforming the wider market. The larger stocks were not doing as well as the rest.
Signs of a Turnaround
Now, things seem to be changing. The rolling return trend has started moving upward again, and that points to a comeback. When this rolling trend climbs, it can mean a shift in market leadership. The Top 10 Equal Weight Index has begun to show better performance than the broader Nifty 500 Index. This early move may be a signal that strength is coming back to the biggest names in the market.
Why the Shift Matters
In recent years, new listings have added to overall market size and weight. As a result, the Top 10 stocks have often looked cheaper in comparison. These large companies, which earlier carried reduced market weight and lower performance, may now be turning into attractive opportunities again. History shows that when such phases end, the biggest companies often begin a fresh upward trend.
Possible Market Cycle Ahead
If this trend continues, the market may move into a cycle where leadership returns to the largest stocks first. After that, the rally can spread to the rest of the large caps, then mid caps, and later small caps. This pattern has played out before, and the early signals point in the same direction today. While this is not a final conclusion, the data gives a strong reason to watch the Top 10 stocks closely.
