Nifty’s surge from 23k to 24k: Top 5 stocks drive 71% of gains

The Indian market is experiencing relentless bullish momentum characterized by a series of record highs, frequent milestone achievements, and the establishment of new benchmarks. On Thursday, June 27, the benchmark Nifty breached the 24,000 mark for the first time.

Continuing the rally, the Nifty 24,100 points for the first time, hitting a new record high of 24,174 points on Friday, June 28. This impressive rise reflects strong investor confidence and optimism, driven by positive economic indicators, anticipated policy stability, and increased foreign investment inflows.

According to a report by Geojit Financial Services, during the rally from 23,264 points on June 3rd to 24,041 points on June 27th, the top five stocks are estimated to have contributed nearly 71 percent to the index's gains. In contrast, the bottom five stocks exerted a drag of approximately 27 percent on the index's performance during this period, further informed Geojit. This highlights the significant influence that a handful of leading stocks can have on the overall movement of the market index.

The top 5 contributors for this period were HDFC Bank, Infosys, ICICI Bank, Bharti Airtel, and M&M while the top draggers were Adani Ports, Coal India, Adani Enterprises, SBI, and L&T, said the report.

It also mentioned that during the 1,000-point rally of the Nifty-50 from 23,000 to 24,000, microcaps surged by 9 percent, and smallcaps increased by 6.6 percent. Meanwhile, Nifty Microcap and Nifty Midcap jumped 8.9 percent and 4.2 percent, respectively.

Among the sectors, the Geojit report pointed out that IT, private banks, and services showed higher gains rising 11 percent and 5.5 percent, respectively. The services sector, auto, and healthcare also gained over 5 percent each. On the other hand, PSU banks, public sector enterprises, and energy sectors experienced declined the most, down 8.8 percent and 6.3 percent, respectively. Energy and Metal sectors also witnessed a fall, noted the report.

Moreover, as per the brokerage, during Nifty's journey from 23k to 24k, Shriram Finance, LTIMindtree, Tech Mahindra, Wipro, and Infosys witnessed the highest rise in market capitalization within the Nifty index. Conversely, PowerGrid Corporation, Maruti Suzuki, NTPC, ONGC (Oil and Natural Gas Corporation), and Adani Ports saw the most significant declines in market capitalization. These movements reflect the varied performances and sectoral dynamics influencing stock valuations during the market rally.

With Nifty now above 24,000, the top five sectors cumulatively account for 59.7 percent of the index's weight, while the top ten sectors represent 76 percent. The top 5 sectors now as per weightages are Private sector bank (27.1 percent), Computers - software (12.5 percent), Refineries/Marketing (10.3 percent), Passenger/Utility vehicles) 5.7 percent and Engineering-Designing-Construction (4 percent), observed Geojit.

It further noted that within the Nifty-50, the top five stocks currently hold a weight of 39 percent, and the top ten stocks comprise 56.7 percent of the total index weight. This concentration indicates that a significant portion of the index's performance is driven by a relatively small number of sectors and stocks.

The top 5 stocks as per weightages currently are - HDFC Bank (12.1 percent), Reliance Industries (9.8 percent), ICICI Bank (8.1 percent), Infosys (5.3 percent), and L&T (4 percent).