Nifty Sector Indices: Opportunity or Concentration Risk? 10Nov2026

Nifty Sector Indices: Opportunity or Concentration Risk? 10Nov2026

 
Follow @vrk100
 

(This is my 546th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

Why examine Nifty sector indices?

Sector investing is becoming an important choice for retail investors looking beyond broad market indices. 

According to the data published by mutual fund industry body AMFI (Association of Mutual Funds in India), sectoral funds in equity segment have a combined AUM or assets under management of about Rs 1.47 lakh crore as of 31Oct2026.

But are these indices truly investable through passive funds? 

How diversified are they, or are they dominated by a handful of stocks? 

This exercise examines sector concentration, stock weights and the availability of ETFs and index funds to assess how accessible these opportunities are for retail investors.

(article continues below)

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Related blogs:

Nifty Indices Broad Market and Sector Review – September 2026 08Oct2026

Nifty Indices Broad Market and Sector Review - Aug2026 06Sep2026 

Nifty Indices Broad Market and Sector Review – July 2026  02Aug2026

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2. Sector indices cover a large part of the market

The top 10 Nifty sector indices together account for 83.0 per cent of the Nifty Total Market Index, as of 31Oct2026 (see Chart 1 below). 

Financial Services is the largest, with a 29.8 per cent weight, followed by Healthcare at 7.7 per cent and Capital Goods at 7.6 per cent.

But a large sector does not automatically make it a good investment opportunity. Two things matter: how concentrated the index is in a few stocks and whether retail investors have enough passive funds to invest in it.

Chart 1 showing Concentration in Top 10 Nifty sector indices - stock weights and HHI (data as of 31Oct2026):

(Please click on the chart to view better)

3. How concentrated are these indices?

The weight of the top 10 stocks tells us how much of an index is driven by its largest companies.

As shown in Chart 1 above, Information Technology (Nifty IT) sector is the most concentrated. Its top 10 stocks account for 100 per cent of the index, with the largest stock alone accounting for 31.7 per cent.

The concentration of Nifty IT index is so high that top five stocks alone account for 80 per cent of the total weight. 

Nifty Oil and Gas, Nifty FMCG and Nifty Telecommunications are also highly concentrated, with top 10 stock weights of 93.8 per cent, 92.1 per cent and 99.0 per cent respectively.

Don't forget to check weights of top 5 stocks in these indices. 

At the other end, Nifty Capital Goods is relatively diversified. Its top 10 stocks account for only 52.2 per cent of the index.

Nifty Healthcare is another relatively diversified sector, with a top 10 weight of 76.4 per cent. If you take top 5 stocks' weight of nearly 50 per cent, one cannot rule out the fact that Healthcare index too is a concentrated bet. 

4. What does HHI tell us?

The Herfindahl-Hirschman Index (HHI) provides another way to measure concentration. A higher number means the index depends more heavily on a few large stocks (check Chart 1 above for HHI estimates).

As of 31Oct2026, Nifty IT index has the highest HHI at 1,772, followed by Oil and Gas at 1,652 and Telecommunications at 1,623. Nifty Capital Goods has the lowest HHI at 378, followed by Healthcare at 758.

This reinforces the concentration picture. Investors choosing sector indices should remember that buying an index does not always mean getting broad diversification.

HHI is a statistical measure calculated by squaring the percentage weight of each stock in the index and adding these squared values. 

A higher HHI indicates greater concentration in a few stocks, while a lower HHI indicates better diversification.

5. Are there enough passive funds to invest?

The availability of ETFs and index funds is an important part of investability.

Nifty IT leads by a wide margin, with 10 ETFs and six index funds. These 16 funds have a combined AUM of Rs 6,393 crore (data as on 30Sep2026).

Nifty Metal index comes next, with six ETFs and one index fund, managing around Rs 1,60o crore. Healthcare has 3 ETFs with a combined AUM of just Rs 343 crore.

Financial Services, Auto, Oil and Gas, and FMCG each have two passive funds. Their AUMs (assets under management) are insignificant.

There are currently no ETFs or index funds tracking Nifty Capital Goods, Consumer Services or Telecommunications.

Chart 2 showing Nifty Sector indices investability: ETFs and Index funds tracking them (data as of 30Sep2026) >

6. Takeaway for retail investors?

Most Nifty Sector Indices are highly concentrated, with a handful of stocks dominating their weights. Capital Goods is the notable exception, offering better diversification, but no passive mutual fund currently tracks this index. 

Nifty IT and Nifty Metal indices have the widest choice of passive funds, but also carry concentration risks. Overall, less experienced retail investors may be better off avoiding sector-based passive funds and sticking to broad-based market indices. 

A sector index may offer exposure to a specific opportunity, but it does not necessarily offer diversification.

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References:

Rupee Vest weblinks for Nifty sector passive funds (index or ETFs) tracking these sector indices:

Nifty Financial Services
Nifty Healthcare
Nifty Capital Goods (no passive funds)
Nifty Auto
Nifty IT
Nifty Oil & Gas
Nifty FMCG
Nifty Consumer Services (no passive funds)
Nifty Metal
Nifty Telecommunications (no passive funds)

Nifty Broad Market and Sector Indices' factsheets:

Nifty Index factsheets 

Nifty Total Market factsheet 

Nifty Financial Services factsheet 

Nifty Bank factsheet 

Nifty Capital Goods factsheet 

Nifty Healthcare factsheet 

Nifty Auto factsheet 

Nifty Oil & Gas factsheet 

Nifty IT factsheet 

Nifty FMCG factsheet 

Nifty Metal factsheet 

Nifty Consumer Services factsheet 

Nifty Telecommunications factsheet 

Nifty Power factsheet 

Nifty Consumer Durables factsheet  

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Additional data:

Tweet 02Aug2026: It's time NSE India / Nifty Indices expanded the Nifty IT Index from 10 stocks to, say, 15.

Herfindahl-Hirschman Index: HHI estimate is based on top 10 stocks of each index; when number of stocks is more than 10, the calculation assumed equal weight for the remaining stocks

HHI shown in Chart 1 above is an estimate. It uses the exact weights of the top 10 stocks of each index. Where an index has more than 10 stocks, the remaining stocks are assumed to have equal weights. This gives the lowest possible HHI, so the true value is equal or higher.

Nifty Pharma index tracks two passive funds (both ETFS) as of 30Sep2026.

Nifty Bank has 24 passive funds tracking the index, with substantial AUM as of 30Sep2026.

Nifty Energy index has five passive funds (4 ETFs and 1 index fund) as of 30Sep2026. Some of the stocks in Nifty Energy index overlap with stocks in Nifty Capital Goods index.

JP Morgan Guide to Markets Oct2026

 JP Morgan Guide to Markets Oct2026

 

Follow @vrk100

 

 

(This is for information purposes only. This should not be construed as a recommendation or investment advice even though the author is a CFA Charterholder. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

 

 

(This blog is special because some of the charts are explained in detail)

JP Morgan Asset Management publishes a comprehensive presentation every month end, containing various slides on global markets, especially those relating to the US markets.

 

This is a very useful and informative guide for financial market professionals or FMPs.  This "JP Morgan Guide to the Markets" can be accessed here. The following are some of the highlights / images presented in this guide: all the data are at the end of 30Oct2026:

Chart 1 showing price index of S&P 500, includes forward PE, dividend yield and Treasury yield >

as of 31Oct2026 >

7,580 index level

18.4 forward PE

1.40% dividend yield

4.90% US Treasury yield

as of 24Mar2000 >

1,527 index level

25.2 forward PE

1.40% dividend yield

6.20% US Treasury yield

Chart 2 showing PE of top 10 and remaining stocks is S&P 500, also shows the weight of top 10 companies in S&P 500 and their share of earnings (past 12 months) >

Tweet thread 30Oct2026:

Market cap weight of Top 10 stocks in S&P 500:

40.6% Sep2026

35.8% Sep2024

18% 2015

21% 2005

27% 2000 (Dotcom Bubble)

18% 1995

21% 1985

Market cap weight of Top 10 stocks in S&P 500 dropped significantly from 40.6% in Sep2026 to 38.9% in Oct2026.

The early trends of Nov2026 clearly indicate this is likely to fall further (hint: Nasdaq Composite fell 5.5% on 05Nov2026, due to fears of AI investments slowing down after the Democratic Party won both Houses of Congress in 03Nov2026 mid term elections in the US).

The nearly historically high concentration of 38.9% market cap weight of top 10 stocks in S&P 500 needs some context.

In addition to their historically elevated share of S&P 500 market cap, the top 10 stocks accounted for 36.6% of the index’s trailing 12-month earnings as of Oct2026, a level near its historical peak.

Market concentration risk is very high for S&P 500 index. Passive investors need to be aware of this phenomenal change in the structure of the index. 

Chart 3 showing Performance of Mag 7 stocks vs S&P 493 >

Mag 7 or Magnificent 7 stocks are:

Alphabet

Amazon

Apple

Meta (Facebook)

Microsoft

Nvidia

Mag 7 stocks have significantly outperformed the S&P 493 and S&P 500, driven by strong technology-led returns.

Mag 7 earnings growth remains substantially stronger, forecast at 55% in 2026 versus 25% for the S&P 493.

Look at the chart for Mag 7 outperformance for 2021, 2023 and 2024.

Broad-based recovery: Economic growth benefits most sectors and income groups, with gains spread across businesses, employment and consumers.

K-shaped recovery: Different segments move in opposite directions—technology and asset owners prosper, while lower-income households and vulnerable sectors lag.

While years 2022, 2023, 2024 and 2025 show that it is mostly K-shaped recovery in the US economy, driven mainly by Mag 7 stocks.

But 2021 is kind of benchmark for broad based recovery, with both S&P 493 and Mag 7 doing very well (post-COVID 19 recovery), though Mag 7 outperformed the rest.

2021 context: Reopening, stimulus and pent-up demand drove a broad-based corporate earnings rebound, benefiting the S&P 493 alongside Big Tech.

Chart 4 showing S&P EPS growth and its sources >

Historically, the biggest contributor of EPS growth (between 2001 and 2025) for S&P 500 is revenue growth (5%), followed by margin expansion (2.4%) and share count (1%). 

But year 2026 (forecast) is different with margin expansion becoming the biggest contributor (19.8%) of EPS growth. 

In contrast to the historical period, share count in 2026 has increased, as Big Tech companies are issuing more equity capital to support AI buildout (earlier they were doing share buybacks hugely). 

AI buildout is investments by companies in developing artificial intelligence, such as data centres and others AI infra. 

Chart 4 above is explained with a following hypothetical example:

EPS growth breakdown or sources of EPS growth >

EPS (Earnings Per Share) is broken into three components because a company's earnings per share can increase for only three fundamental reasons:

1) It generates more revenue.

2) It keeps more profit from each dollar of revenue (higher margins).

3) It has fewer shares outstanding.

Note: Due to share buybacks / repurchases, shares outstanding comes down -- less number of shares means EPS growth. On the other hand, if share count increases, EPS comes down. 

The mathematical relationship explains it.

EPS or earnings per share = (Revenue × Net Profit Margin)​ / Shares Outstanding

  ... since, net income or net profit = revenue × net profit margin

So, the three sources of EPS growth are:

> revenue growth

> margin expansion (net profit margin)

> changes in shares outstanding

The EPS breakdowns helps distinguish between high-quality and potentially weaker earnings growth.

> EPS growth driven by revenue = genuine business expansion

> EPS growth driven by margins = improved efficiency or pricing power

> EPS growth driven by buybacks = financial engineering or capital allocation (not necessarily bad)

Chart 5 showing S&P 500 earnings by sector >

Surprisingly, the biggest contributor of earnings is energy sector (119%) (massive rise in crude oil prices) in 2026, following by Technology and communications services sectors.  

Chart 6 showing components of US GDP growth >

Historical averages (2000-2025):

consumption: 67% of nominal GDP 

fixed investment: 13%

govt spending: 19%

residential: 4%

net exports: -4%

Chart 7 showing foreign-born share of labour force and labour force participation rate (LFPR) >

Foreign born share of labour force has been growing, but LFPR has been declining over the years.

Main reasons for LFPR decline over the years:

Ageing population (Baby boomers moved out of the labour force)

Declining prime-age male participation

More young adults staying in education and delaying workforce entry

Structural economic shifts: Manufacturing decline, automation and globalisation 

Health and social factors

COVID-19 pandemic: Business closures, childcare disruptions, health concerns and early retirements triggered a sharp fall in labour force participation. 

From 67% levels in 1997, labour force participation rate has declined to 61.8% in Sep2026. 

Chart 8 showing average tariff rates in the US > Trump tariffs >

10.6% Oct2026

15.9% Feb2026

30.0% 08Apr2025 (peak Trump tariffs)

nearly 8% 2024 (prior to Trump tariffs)

Chart 9 showing bond performance when stock returns were negative  >

The chart shows only the 25 years between roughly 1930 and 2022 when the S&P 500 had a negative annual return.

Bonds usually rise when stocks fall. In 21 out of those 25 years, bonds delivered positive returns when stocks were negative.

Bonds provide diversification. For example:

    1931: Stocks fell 40%, while bonds gained 2%.

    2008: Stocks fell 37%, while bonds gained 5%.

    1974: Stocks fell 26%, while bonds gained 3%.

But bonds aren't guaranteed protection. In 2022, both stocks and bonds fell significantly:

    Stocks: -18%

    Bonds: -13%

Stocks drive long-term growth; bonds help reduce portfolio volatility and cushion losses during stock market downturns.

However, the relationship isn't guaranteed. When inflation and interest rates rise sharply, stocks and bonds can fall together.

That's why diversification across asset classes matters.

Chart 10 showing share of global market capitalisation of major countries; and YTD returns of major stock markets globally >

USA 65% of global market cap

EM 11%

Europe ex UK 10%

Japan 5%

YTD returns in USD terms (end-Dec2025 to end-Oct2026) >

11.8% S&P 500

10% EAFE

13.8% EM

17.9% Japan

10.8% UK

-17.9% China

-13.7% India (lack of AI stocks)

56.4% Taiwan (semiconductor / AI boom)

67.4% South Korea (semiconductor / AI boom)

Chart 11 showing cycles of international outperformance and US dollar >

As per this chart: international stocks and US stocks move in long-term cycles of relative outperformance. Those cycles appear to be related to the strength of the US dollar.

It uses rolling 2-year annualized returns.

The purple area shows how much international stocks outperform or underperform US stocks over a rolling two-year period.

    Above zero: International stocks outperform U.S. stocks.

    Below zero: U.S. stocks outperform international stocks.

For example:

    +10% means international stocks outperform by approximately 10 percentage points annually.

    -10% means international stocks underperform by approximately 10 percentage points annually.

A simple case for international diversification for US investors away from only US stocks >

2011–22: U.S. stocks enjoyed a prolonged period of dominance.

2023–26: International stocks have begun recovering relative to U.S. stocks.

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Related Blogs: 

JP Morgan Guide to Markets Sep2026

JP Morgan guide to Markets Jun2026

JP Morgan Guide to Markets Dec2025 

JP Morgan Guide to Markets Jun2025

JP Morgan Guide to Markets Mar2025 

JP Morgan Guide to Markets Feb2025 

JP  Morgan Guide to Markets Dec2024

JP Morgan Guide to Markets Oct2024 

JP Morgan Guide to Markets Sep2024 

JP Morgan Guide to Markets Jul2024

JP Morgan Guide to Markets Jun2024 

JP Morgan Guide to Markets Mar2024 

JP Morgan Guide to Markets Dec2023 

JP Morgan Guide to Markets Sep2023 

JP Morgan Guide to Markets Aug2023 

JP Morgan Guide to Markets Apr2023 

JP Morgan Guide to Markets Mar2023 

JP Morgan Guide to Markets Jan2023 

JP Morgan Guide to Markets Dec2022 

JP Morgan Guide to Markets Oct2022 

JP Morgan Guide to Markets Sep2022 

JP Morgan Guide to Markets Jul2022 

JP Morgan Guide to Markets Apr2022 

JP Morgan Guide to Markets Jan2022 

 

Nifty Next 50 Index: October 2026 Review 04Nov2026

Nifty Next 50 Index: October 2026 Review 04Nov2026

 
Follow @vrk100
 

(This is my 545th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

Looking up the Next Generation: The Nifty Next 50 is often seen as a pool of future large-cap companies. But its changing composition also offers useful insights into market trends.

A look at the stock and sector weights over the past four months from July to October 2026 reveals some interesting developments. 

All data are as at the end of the respective month, unless otherwise stated. 

(article continues below)

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Related articles:

The Next Generation of Market Leaders: A Fresh Look at Nifty Next 50's Corporate Landscape 15Jan2026

The Little Secret Behind Nifty Next 50's Recent Success 13May2024

NSE Emerging Indices Fundamentals Comparison 31Dec2025 

NSE Indices Calendar Year Returns 2006 to 2025  07Jan2026 

Adani Stocks Meltdown and Nifty Next 50 Index 15Feb2023 

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2) Stock-wise gist: A Gradual Rise in Stock Concentration:

The top five stocks accounted for 20.1 per cent of the Nifty Next 50 index weight in Oct2026. This was higher than 18.6 per cent in Jul2026. The percentages for the top ten stocks are 33.9 and 32.8 respectively. 

The increase is gradual, but it suggests that the leading stocks are gaining a slightly larger share of the index.

Divi's Laboratories and TVS Motor Company remained the two largest stocks in all four months, with weights rising for both the stocks in the past four months.

Hindustan Aeronautics, Tata Motors Ltd (commercial vehicles) and Adani Power also remained among the leading stocks.

Vedanta Aluminium Metal entered, after its demerger from Vedanta Ltd, the index in Sep2026 replacing BPCL. 

There is considerable continuity among the top ten stocks. However, their relative weights are changing.

Chart 1 showing top 10 stocks by weight from July to October 2026 >

(click on the chart to view better)

3) Sector-wise gist: Minor shifts in sector leadership: 

The sector picture is particularly interesting.

Capital Goods became the largest sector in Oct2026, with a weight of 19.7 per cent. Financial Services followed at 18.0 per cent.

In Jul2026 and Aug2026, Financial Services occupied the top position. Capital Goods moved ahead in Sep2026 and retained the lead in Oct2026.

Auto, power, healthcare and metal sectors have remained in the top 6 positions throughout the four-month period. 

These numbers suggest that capital goods, financial services and automobiles are important drivers of the Nifty Next 50.

Top Sectors Dominate the Index:

The combined weight of the top three sectors was 47.7 per cent in Oct2026. This was almost unchanged from Jul2026.

The top five sectors accounted for 66.6 per cent in Oct2026. This was higher than 65.1 per cent in Jul2026.

In other words, nearly two-thirds of the index is represented by just five sectors.

This is an important point for investors. Although the Nifty Next 50 contains 50 companies, its sector exposure is not evenly distributed. 

One interesting development is the return of Information Technology to the top ten sectors of the Nifty Next 50.

The IT sector had a weight of 3.3 per cent in Sept2026. It entered the top ten sectors at tenth position.

This was partly driven by the inclusion of Wipro Ltd in the Nifty Next 50 during the Sep2026 index review. Wipro moved out of the Nifty 50 and entered the Nifty Next 50.

By Oct2026, the IT sector's weight had increased to 3.9 per cent, moving up to ninth position.

This is a good example of how index reconstitution itself can change sector representation, even without a major change in the underlying market trend.

Chart 2 showing top 10 sectors by weight from July to October 2026 >

(click on the chart to view better)

4) Investors' takeaway:

The Nifty Next 50 offers exposure to companies beyond the Nifty 50. Historically, some of the leading stocks in the Nifty Next 50 eventually graduate to the Nifty 50. 

The Nifty Next 50 therefore serves as an important dashboard for potential future Nifty 50 components.

Stock weights reveal which companies have a larger influence on index performance. Sector weights show where the index has greater exposure.

The latest data points to rising stock concentration and a strong presence of capital goods, financial services and automobiles.

These trends can change over time. Investors should therefore track changes in both stock and sector weights rather than assume that the index always offers broad diversification.

The Nifty Next 50 is not simply a list of tomorrow's large-cap companies. It is also a reflection of changing market leadership.

Potential Nifty 50 stocks?

Divi's Laboratories and TVS Motor Company, currently the two largest stocks of the Nifty Next 50 by weight, could be among the candidates for an inclusion in the Nifty 50 in the next index review in Mar2027. 

Their potential elevation would be another example of the Next 50 acting as a pipeline for future Nifty 50 stocks.

This is just for educational purposes. This should not be construed as investment advice. You had better consult your own financial adviser before considering any investments. 

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Additional data:

1) Comprehensive data Nifty Next 50 (three images below) :

Top 10 stocks Mar2025 to Dec2025

Corporate group concentration Dec2025

Sector weights in Dec2025 - Nifty Next 50 vs Nifty 500

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References:

Tweet thread 23Apr2026 on Nifty Next 50 index

Tweet thread 28Oct2025 on Nifty Next 50 index

Nifty Next 50 index factsheet - PDF latest month

Nifty Indices Factsheets (NSE Indices) 09Jul2026 - for old factsheets

Nifty Next 50 factsheet as on 31Oct2026 >

Nifty Total Market Index: The Big Picture for October 2026

Nifty Total Market Index: The Big Picture for October 2026 03Nov2026

 
Follow @vrk100
 

(This is my 544th blog since 2010. Over the years, I have covered global financial markets, with a focus on India, and continue to share insights to help readers understand complex topics in simple language.

The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. 

Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.) 

The Nifty Total Market Index offers one of the broadest views of the Indian stock market. It covers 750 stocks across large, mid, small and microcap segments. 

With full market capitalisation coverage of about 88 per cent of Indian stock market, Nifty TM index can be used as a useful proxy for understanding the broader Indian equity market.

This blog delineates how its leading stocks and sectors have changed over the past four months, from July to October 2026. All data are as at the end of the respective month, unless otherwise stated. 

(article continues below)

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Related articles:

Nifty Total Market Index: Sector Rotation So Far in 2026 11Oct2026 

Inside the Nifty 500 Index: How It Changed from 2021 to 2026 28Jul2026 

Nifty 500 Snapshot 30Jun2026

Beneath the Surface: What 750 Stocks Reveal About Market Breadth 05Apr2026 (Nifty Total Market Index)

Inside the BSE 500 and S&P 500: Top Stocks, Top Sectors, Big Risks 31Dec2025

NSE Emerging Indices Fundamentals Comparison 31Dec2025

BSE 500 vs Nifty 500: Same Market, Different Indices 31Dec2025

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2) Stock-wise summary: Stability at the Top:

The top of the index has seen very little change. HDFC Bank, ICICI Bank, Reliance Industries, Bharti Airtel and Larsen & Toubro (in that order) retained the top five positions throughout the four months.   

The changes were largely further down the list. State Bank of India moved between sixth and seventh positions, while Infosys and Axis Bank also saw minor shifts.

The notable change in October was Bajaj Finance entering the Top 10, replacing Mahindra & Mahindra.

The combined weight of the top 10 stocks stood at 28.2 percent in July. It dipped to 27.2 percent in September before recovering to 28.5 percent in October. The top five stocks accounted for roughly 19 percent to 20 percent throughout.

Chart 1 showing top 10 stocks by weight from July to October 2026 >

(click on the chart to view better)

3) Sector-wise summary: Healthcare Gains Ground: 

Financial Services sector continues to dominate the index, accounting for nearly 30 percent of its weight. However, its share was marginally down from 30.2 percent in July to 29.8 percent in October 2026.

Healthcare was the biggest gainer among the leading sectors. It moved from fourth position in July to second in October. Its weight increased from 7.4 percent to 7.7 percent.

Capital Goods moved in the opposite direction. Its weight declined from 7.7 percent to 7.6 percent, while its ranking slipped from second to third.

Automobiles also lost some ground, with their weight falling from 7.4 percent to 7.1 percent.

Information Technology showed a notable improvement. Its weight rose from 6.3 percent in July to 7.0 percent in October, moving into fifth position.

Consumer Services: New-Age Businesses Gain Ground:

Consumer Services is a sector worth watching. It includes several fast-growing businesses that reflect changing consumption patterns in India. 

These include Eternal (Zomato), Trent, Swiggy, Indian Hotels Company, Nykaa and Lenskart.

The sector's weight in the Nifty Total Market Index increased from 3.9 percent in July to 4.3 percent in October. It also moved up from ninth to eighth position among the top 10 sectors.

The rising weight reflects the growing presence of businesses linked to online food delivery, quick commerce, organised retail, hospitality, beauty and lifestyle consumption. These are among the evolving segments of the Indian econony.

This makes Consumer Services an interesting sector to track, as it captures some of the structural changes taking place in India's consumption landscape.

Chart 2 showing top 10 sectors by weight from July to October 2026 >

(click on the chart to view better)

4) What Does This Tell Us?

The four-month data suggests that the Indian market's overall structure remains relatively stable. The leading stocks and sectors have not changed dramatically. However, some interesting shifts are taking place beneath the surface.

Consumer Services stands out. It brings together several businesses at the forefront of India's changing consumption story, including Eternal (Zomato), Swiggy, Trent, Nykaa, Lenskart and Indian Hotels.

Its growing presence in the index reflects the increasing importance of these newer business models in India's equity market.

The takeaway is that while traditional heavyweights such as banks continue to dominate the market, newer consumption-driven businesses are gradually gaining ground. Consumer Services is a sector worth watching over the coming years.

This is just for educational purposes. This should not be construed as investment advice. You had better consult your own financial adviser before considering any investments. 

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Additional data:

1) Nifty Total Market vs Nifty 50 (data as of 31Oct2026):

The top 10 stocks have identical rankings in both indices, but carry higher weights in the Nifty 50.

But the top 10 sectors in these two indices are not identical. As shown above, Financial Services, Healthcare, Capital goods, Auto and IT are the top five in Nifty Total Market. However, the top five sectors in Nifty 50 are Financial Services, Oil & Gas, IT, Auto and Telecommunication. 

Financial Services dominates both, with a much higher 37.1 per cent weight in the Nifty 50 versus around 30 per cent in the Nifty Total Market.

The Nifty Total Market offers wider exposure to midcap, smallcap and microcap companies, including emerging businesses in Consumer Services.

While the Nifty 50 captures India's largest companies, the Nifty Total Market offers a broader picture of the Indian equity market.

2) Top sectors: No of companies by industry group / sector in Nifty TM Index (latest data 31Oct2026) >

No of companies    Industry group / sector                      

50 industrial products

48 pharmaceuticals & biotechnology

40 chemicals & petrochemicals

40 consumer durables

39 IT software & services

37 auto components & equipment

35 electrical equipment

34 banks

24 construction

24 power

24 retailing

20 NBFCs (part of finance)

20  capital markets

20  real estate (realty)

19 healthcare

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References:

Nifty Total Market index factsheet - PDF latest month

Nifty Indices Factsheets (NSE Indices) 09Jul2026

Nifty TM factsheet as on 31Oct2026 >