Friday was a down day for Nifty 50 but that was after the index crossed yet another milestone on Thursday. On Thursday, the Nifty 50 index closed above 25,000 for the first time. It had scaled 20,000 for the first time on September 13, 2023 and since then it has been a remarkable journey for the index, through geopolitical tensions, budgets and an election. Which companies powered the index to the new milestone?

Here it is important to note that since the index is based on free-float market cap, the best performing stocks may not necessarily have been the drivers of this 5,000 point rally. Index movement is a function of stock price change as well as the weight of the stock in the index. So, we analysed which companies contributed the most to this upside and which didn’t on both these factors.

Top 5 drivers of the index based on increase in weights

Bharti Airtel has powered the index the most with the highest increase in weight in index in this run up, followed by Mahindra & Mahindra. When stocks outperform the index, their weights will increase.

Bajaj Auto on top gear

In terms of absolute performance, Bajaj Auto was the top performer, though it was not the biggest driver of the index. This is due to its relatively lower weightage in index. The respective increase in weights for the top five gainers were 40 bps, 23 bps, 36 bps, 51 bps and 41 bps respectively.

Heavy weight HDFC Bank lags the index

HDFC Bank led the pack of laggards, even though it hasn’t given negative returns during this period. It has traded flat while Nifty 50 has moved up 25 per cent. Consequently, its weight in the index has taken a hit.

Top 5 losers

In terms of absolute stock returns, Bajaj Finance was the worst performer, though it did not see the maximum reduction in weights.

Note: For this analysis, UPL is excluded as it is not part of Nifty 50 now. Change in weights based on constituent weights as of August 2023 and factoring for share price changes from Nifty at 20,000 to Nifty at 25,000. Price performance is for the period September 13, 2023 – August 1, 2024.

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