BSE’s mid- and small-cap indices have risen 12% and 10%, respectively, from their lows in July. Compared to their respective highs in January, the two indices are down 8% and 15%, respectively.

But these numbers mask the huge correction in these segments of the market. As the accompanying chart shows, 74% of mid-cap stocks and 82% of small-cap stocks have declined compared to their levels on 23 January, when the broad markets had peaked.

In the small-cap segment, 63% of the stocks have fallen by more than 20% and nearly half of them fell by over 30%. The large-cap segment, meanwhile, has been fairly resilient, with 41% of stocks in the segment advancing during the period.

With the Nifty hitting new peaks lately, the point has been made that the rally in the Indian markets is very selective and restricted to a handful of large-cap stocks.

What broad-market indices also conceal is that the large majority of stocks have corrected sharply this year. As such, the only portfolios that have done well this year are limited to those that have large exposures to the stocks that have bucked this general trend.