Indian markets’ bull run throws up select gainers

India may be Asia’s best-performing major market this year, but not everyone is rejoicing the return of the nation's benchmark gauges into record territory.

A peek under the hood of the S&P BSE Sensex gauge’s 7.3 per cent gain this year shows it’s being dominated by three stocks — Tata Consultancy Services, Reliance Industries and HDFC Bank. A little over half of the 30 Sensex stocks are trading higher than their 200-day moving average (200-DMA) price, down from 94 per cent in January when the gauge peaked.

Gains have been lopsided as investors sought safety in the biggest stocks amid headwinds from a brewing trade conflict and elevated prices of oil, the country’s top import. A selloff in mid- and small-cap stocks, made worse by stringent margins imposed in June, has left smaller firms trading near the biggest price discount to the Sensex since July 2016, data compiled by Bloomberg show.

“The Sensex is at a new high while the broader market is nowhere near. This suggests the market has been very discerning in picking winners," said Sanjiv Bhasin, an executive vice president at Mumbai-based brokerage India Infoline.

The Sensex has jumped 12 per cent from its March low to become the first among major benchmark Asian equity gauges to rebound from a correction this year. The recovery has been fuelled by persistent buying by local mutual funds and optimism about corporate earnings for the June quarter. The S&P BSE mid-cap, in contrast, is down 13 per cent this year after hitting multiple records in 2017.