Midcap-to-Nifty outperformance gap rises to 26% from 14% seen till August

The curtains draw on 2023, unveiling a spectacular performance on the Indian equity stage. In 2023, the benchmark indices of Sensex and Nifty have recorded a gain of 18% each. This accomplishment gains even greater significance as it stands as the most robust market performance in the past six years, excluding the turbulence of the COVID-impacted year. Yet, amid this stellar backdrop, it is the broader markets that steal the limelight. The Midcap Index has scripted an unparalleled surge that positions it for its strongest twelve-month performance in at least the past six years—excluding the pandemic-ridden period.

The trajectory of the Midcap Index is nothing short of meteoric, with a resounding 45% surge in 2023, overshadowing the 18% gain in the benchmark Nifty 50. This staggering outperformance, a gap of more than 25%, marks a historic high over the last two decades, encapsulating the resilience and vitality of the midcap segment in the current financial landscape.

Building on trends observed in the first half of the year, where broader markets showcased their outperformance over benchmarks, the Midcap Index has not only maintained but nearly doubled its lead from August levels. This sustained momentum reaffirms a pattern seen over the past 20 years, where the first-half outperformance tends to extend into the remaining period of the year.