According to CNBC, India’s economy grew 7.8% in the June quarter, prompting Morgan Stanley and Citi to raise their growth forecasts for the year ending in March 2027 to 7.3% from 6.7% and 6.9%, respectively. Even so, the Nifty 50 has fallen 8% since the start of the year and closed slightly lower on Tuesday, while the Nifty Midcap 150 has risen 10% over the past year.

Analysts said the gap reflects the Nifty 50’s heavy concentration in financial services and IT, which has left it less exposed to manufacturing, fintech and consumer technology. HDFC Securities Managing Director and Chief Executive Dhiraj Relli said weakness in some large-cap names has held back the headline indices, while small- and mid-cap stocks have performed much better. Garima Kapoor of Elara Capital said the shift in India’s economy is moving beyond large-cap benchmarks, with profit pools increasingly shifting toward mid-caps.