Nifty 50 Shows Stronger Seasonality Than Mid-, Small-Cap Indices In April-June Over 10-Year Period

India’s equity markets have been under pressure for nearly five months now, amid unabated selling by foreign institutional investors (FIIs). The Nifty has cascaded over 14 per cent from its all-time high registered in late September 2024. The Sensex too has corrected more than 13 per cent during the same time period.

The cut is even deeper in the broader market, as mid-cap and small-cap stocks have taken a bigger hit. The Nifty Midcap 100 and Nifty Smallcap 100 have seen a drawdown of 18.4 per cent and 21.8 per cent, respectively, from their record highs.

The ongoing sell-off has come amid a complex mix of domestic and international factors. Weaker-than-expected Q3 numbers, Trump’s decision of reciprocal tariff, a depreciating rupee, rising bond yields, and concerns over higher valuations of Indian equities among others have led to a broad-based sell-off in the market.

Given the current market conditions, can investors expect India’s stock market in the upcoming Q1 FY26 (April-June 2025) period to bounce back or continue to slide?

To gain some perspective into this, Outlook Money analysed the seasonality of three key indices across market capitalisations – Nifty 50, Nifty Midcap 100, and Nifty Smallcap 100 – over the past 10 years during the April-June period.

Seasonality refers to the tendency of certain stocks or market indices to perform better or worse during specific periods of the year. Stocks often show seasonal patterns around the time companies report their quarterly earnings, and Q1 is typically considered a stronger period for the markets, fuelled by expectations of a recovery and strong earnings.

Let’s take a look at what the data suggests.

Overall Trend Remains Positive In April-June

During the April-June period, the benchmark Nifty 50 posted positive returns in eight of the last 10 years, showing strong positive price seasonality.

Meanwhile, the broader market indices, the Nifty Midcap 100 and Nifty Smallcap 100, have shown relatively weaker seasonality during the same period, with positive returns in seven and six out of the last 10 years, respectively.

Nifty 50 Vs Broader Market In April-June: A Decade In Review

• In 2015, while the large-cap-heavy Nifty 50 slid 1.45 per cent, Nifty Midcap 100 managed to stay buoyant, posting flat, but positive returns, while the Nifty Smallcap 100 saw a drawdown of 5.30 per cent.

• In 2016, Nifty 50 and Nifty Midcap 100 gained 7.10 per cent and 8.30 per cent, respectively, while Nifty Smallcap 100 delivered even a bigger return of 19 per cent.

• The year 2017 was a relatively modest year for all three indices, with returns ranging from 3-5 per cent, with small-caps outperforming slightly on the higher end of that range.

• In 2018, benchmark Nifty 50 posted a positive return of nearly 6 per cent. However, Nifty Midcap 100 and Nifty Smallcap 100 delivered negative returns of 3.10 per cent and 7.90 per cent, respectively.

• The year 2019 followed a similar pattern. The Nifty 50 delivered a positive return of 1.40 per cent, while the Nifty Midcap 100 and Nifty Smallcap 100 delivered negative returns of 3.30 per cent and 7.10 per cent, respectively.

• The year 2020, which was plagued by the Covid-19 pandemic, was an exception for the market. Despite the initial sharp decline, all three indices delivered double-digit returns in Q1, as markets bounced back from the crisis.

• The year 2021 also followed a similar trend, but with the Nifty 50 giving a modest 7 per cent return. Meanwhile, the Nifty Midcap 100 outperformed with a gain of 13.80 per cent, almost double that of the Nifty 50. The Nifty Smallcap 100 outperformed both, posting a return of nearly 20 per cent during that period.

• The year 2022 saw a reversal, with all three indices posting negative returns during Q1. The Nifty 50 retreated 9.60 per cent, while the Nifty Midcap 100 fell nearly 11 per cent, and Nifty Smallcap 100 saw the steepest fall, losing 19 per cent.

• In 2023, the market bounced back. The Nifty 50 gained 10.50 per cent, while the Nifty Midcap 100 and Nifty Smallcap 100 posted 19 per cent and 20.50 per cent, respectively.

• The positive momentum continued into 2024, with the Nifty 50 rising 7.50 per cent, while the Nifty Midcap 100 and the Nifty Smallcap 100 up by nearly 16 per cent and 20 per cent, respectively.