'Think about it': Deepak Shenoy warns indices mask stress as majority of Nifty 500 stocks lag

India’s equity markets may look steady at the index level, but Capitalmind Mutual Fund data suggests the broader market continues to face significant stress. 

Deepak Shenoy, CEO of Capitalmind AMC, highlighted the scale of the divergence in a recent post on X, stating: “Think about it: 67% of all Nifty 500 stocks are down more than 20% from their all-time highs.” 

The figure, shared by Capitalmind Mutual Fund, points to a market where headline index resilience masks widespread weakness across individual stocks. A fall of more than 20% from peak levels is generally considered a deep correction, indicating that a substantial majority of the Nifty 500 remains far from recovery. 

Market breadth tells a different story 

Capitalmind’s data highlights a clear disconnect between index performance and stock-level reality. While the Nifty 500 as an index may not reflect a sharp drawdown, two-thirds of its constituents remain significantly below their historical highs, underscoring narrow participation in market gains.

The data suggests that market leadership has become increasingly concentrated, with a smaller group of stocks supporting overall index levels while a majority continue to struggle. This kind of market structure can create the impression of stability even as broader participation weakens. 

What Capitalmind’s numbers signal 

According to Capitalmind Mutual Fund’s analysis: 

• 67% of Nifty 500 stocks are trading more than 20% below their all-time highs 
• The correction is broad-based, rather than limited to a few underperforming sectors 
• Index-level performance alone may not accurately represent the experience of most investors 

Shenoy’s observation draws attention to the importance of market breadth — a measure of how widely gains or losses are distributed across stocks — rather than relying solely on benchmark movements. 

The takeaway from Capitalmind’s data is clear: market health cannot be judged by indices alone. When a majority of stocks remain sharply below their peaks, it signals unresolved stress and uneven recovery within the equity market. 

As Shenoy’s post succinctly frames it, the real story of the market today lies not in where the index stands — but in how many stocks are still struggling to reclaim lost ground.