Bear market in smallcaps fuels largecap resurgence as megacaps claw back to 21% of market cap
A similar pattern is playing out with the Nifty 50 index, which saw its share in total market capitalization decline from 58% five years ago to an all-time low of 42%. That figure is now inching back up to 44%, according to data from DSP Mutual Fund.
(Data: DSP Mutual Fund)
Market cycles at play
Sahil Kapoor, Market Strategist and Head of Products at DSP Mutual Fund, believes this is simply the market’s natural rhythm at play. “Markets have cycles. In the post-Covid cycle, small and midcap stocks did better than largecap stocks, particularly the largest cap stocks. Because of this outperformance of small and midcaps, the share of the top 10 stocks reached an all-time low as a share of total market cap. Over the last four months, this has begun to mean revert,” he said.
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