Market outlook: What is preventing Nifty from hitting record high? Amit Goel answers
Stock market: Goel said the IT index, despite a strong rebound from recent lows, is “still down significantly” from its January-February highs.
- Aug 12, 2026,
- Updated Aug 12, 2026 2:40 PM IST
Nifty’s inability to scale fresh record highs, despite a sharp rebound in broader markets, reflects a widening split inside India’s equity rally. According to market strategist Amit Goel, the real action has shifted decisively to midcaps and smallcaps, where earnings momentum has outpaced the largecap universe and attracted stronger investor participation.
That divergence, the Co-Founder & Chief Global Strategist at Pace 360 argued, is now the defining feature of the market. While broader indices have repeatedly pushed to new highs, the benchmark Nifty remains held back by weaker earnings growth in its heavyweight constituents, persistent foreign selling and the underperformance of the IT pack.
Broader market steals the spotlight
In an exclusive interview to BTTV, Goel said the fundamental case for midcaps and smallcaps is straightforward: earnings growth is simply stronger. “The expected growth in EPS for this year is twenty percent plus for the small cap and mid cap categories,” he said, compared with “only about eight percent” for the Nifty as a whole.
That earnings gap matters because it helps explain why investors have been willing to pay up for broader-market names even as the benchmark index struggles to regain its peak. In effect, the market is rewarding growth visibility over index stability.
FII selling still casts a shadow
The second drag is technical rather than purely fundamental. Foreign institutional investors, who hold a significant share of frontline banking and IT names, have been heavy sellers for much of the year.
Although Goel noted that FIIs have turned buyers over the past five to six weeks, he was clear that the broader balance remains negative. “In the overall picture, they have sold out a lot more than they have bought this year,” he said, limiting the upside for Nifty and Bank Nifty.
IT remains the missing engine
The third pressure point is technology, a sector with outsized influence on benchmark performance. Goel said the IT index, despite a strong rebound from recent lows, is “still down significantly” from its January-February highs and remains “down more than twenty percent.”
That matters because a benchmark cannot convincingly break out when one of its largest earnings and market-cap engines is still repairing damage from a steep correction.
What it means for investors
The takeaway is not that the market rally is weak, but that it is highly selective. Broader-market stocks are benefiting from superior earnings expectations, while largecaps remain tethered to foreign flows and sector-specific weakness.
For investors, the message is clear: India’s rally is intact, but it is no longer being led by the benchmark. Until earnings growth in Nifty heavyweights improves and IT regains lost ground, record highs for the headline index may remain elusive even as the broader market continues to outperform.
Nifty’s inability to scale fresh record highs, despite a sharp rebound in broader markets, reflects a widening split inside India’s equity rally. According to market strategist Amit Goel, the real action has shifted decisively to midcaps and smallcaps, where earnings momentum has outpaced the largecap universe and attracted stronger investor participation.
That divergence, the Co-Founder & Chief Global Strategist at Pace 360 argued, is now the defining feature of the market. While broader indices have repeatedly pushed to new highs, the benchmark Nifty remains held back by weaker earnings growth in its heavyweight constituents, persistent foreign selling and the underperformance of the IT pack.
Broader market steals the spotlight
In an exclusive interview to BTTV, Goel said the fundamental case for midcaps and smallcaps is straightforward: earnings growth is simply stronger. “The expected growth in EPS for this year is twenty percent plus for the small cap and mid cap categories,” he said, compared with “only about eight percent” for the Nifty as a whole.
That earnings gap matters because it helps explain why investors have been willing to pay up for broader-market names even as the benchmark index struggles to regain its peak. In effect, the market is rewarding growth visibility over index stability.
FII selling still casts a shadow
The second drag is technical rather than purely fundamental. Foreign institutional investors, who hold a significant share of frontline banking and IT names, have been heavy sellers for much of the year.
Although Goel noted that FIIs have turned buyers over the past five to six weeks, he was clear that the broader balance remains negative. “In the overall picture, they have sold out a lot more than they have bought this year,” he said, limiting the upside for Nifty and Bank Nifty.
IT remains the missing engine
The third pressure point is technology, a sector with outsized influence on benchmark performance. Goel said the IT index, despite a strong rebound from recent lows, is “still down significantly” from its January-February highs and remains “down more than twenty percent.”
That matters because a benchmark cannot convincingly break out when one of its largest earnings and market-cap engines is still repairing damage from a steep correction.
What it means for investors
The takeaway is not that the market rally is weak, but that it is highly selective. Broader-market stocks are benefiting from superior earnings expectations, while largecaps remain tethered to foreign flows and sector-specific weakness.
For investors, the message is clear: India’s rally is intact, but it is no longer being led by the benchmark. Until earnings growth in Nifty heavyweights improves and IT regains lost ground, record highs for the headline index may remain elusive even as the broader market continues to outperform.