'Stock market rally feels more like recession': Why Nifty at 25K may not cheer few investors

Stock market: The NSE barometer Nifty might have revisited the psychological mark of 25,000 this week after seven months, many investors might not be cheering it as probability is good they would be sitting on losses.  

This isn’t a bull market—it’s a bull illusion, said Apurva Sheth, Head of Market Perspectives & Research at SAMCO Securities. “If you’re not in the handful of heavyweight stocks pulling the index up, you’re likely still in pain,” he said.

Sheth pointed out the fact that Nifty Microcap 250 is still down 12.22 per cent from October 15, 2024, level. The Nifty smallcap index has fallen a similar 12.50 per cent, while Nifty Midcap 150 index declined 6.09 per cent during the same period. This is even as the Nifty50 is where it was in October last year.

Sheth of SAMCO Securities said the headline index is making new highs. But this is not a broad-based bull run. It’s a narrow rally led by a handful of largecaps while the rest of the market has been quietly bleeding.

Among top 750 stocks, excluding the recent 20 IPOs (accounting for over 90 per cent BSE m-cap), nearly 75 per cent of stocks — 540 out of 730, are still in the red. Only 190 stocks delivered positive returns during this period. 

“If you’re stuck in one of the 170 stocks that are down 25 per cent to 50 per cent, this rally feels more like a recession,” SAMCO’s Shah said.

Shah noted that 363 of 730 stocks have fallen up to 25 per cent since October 15, 2024. A total of 170 other stocks fell between 25 per cent and 50 per cent. Seven even nosedived over 50 per cent.

“The Nifty 50 has reclaimed the 25,000 mark after a long, 7-month slog. But before you pop the champagne, take a closer look: the index may be shining, but your portfolio might still be sulking in a corner,” said Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities

The domestic market has delivered a strong performance over the past one month, despite elevated global and local uncertainty.

The strong market performance suggests that markets were pricing in the rapid resolution of ongoing trade and tariff issues with the US and geopolitical risks being under control. 

“In this context, the de-escalation of the conflict between India and Pakistan may provide a limited boost to investor sentiment, with the risk-reward being precariously balanced between (1) an improving macro, (2) a weak earnings growth outlook, (3) further earnings downgrades and (4) elevated valuations,” Kotak said this week. 

“The next time someone says, “Nifty’s at 25k!” — just ask: Yes, but is your portfolio?,” Shah said.