The 30-share index has given returns of -5.73%, while the 50-share gauge on the NSE has clocked in returns of -8.41% in rupee terms since the beginning of the current calendar year, Bloomberg data showed.
The absolute difference between the two leading equity indices, thereby, stands at 2.68% and is the highest since 2009. Market experts cited the difference in index constituents of the indices as the main cause for the disparity in the year-to-date returns of both indices. Apart from the common stock between the two indices, the Nifty has greater weightage assigned to banking, infrastructure, cements and metal companies that have led the steep fall in Indian equities since July.
All together, there are 22 companies in Nifty that do not form part of the Sensex. These 22 companies have contributed to a 203.16-points, or 29.4%, fall in Nifty's overall performance. The Nifty has fallen 690.7 points (-8.41%) so far this year.
Stocks belonging to the banking and financial services space have done major damage with six companies Axis Bank, Bank of Baroda, Punjab National Bank, IDFC, IndusInd Bank and Kotak Mahindra Bank contributing to a 113.49 points, or 17%, drop in Niftys returns.
Similarly, five stocks from the infrastructure and utilities sectors, including ADAG Group company Reliance Infra, which are not part of the Sensex pushed down the Niftys performance by nearly 52 points. Another sectoral representation, which has affected Nifty, is that of cement. The presence of ACC, Ambuja Cement, UltraTech Cement and Grasim Industries dragged Niftys returns by 51.35 points YTD.
On the other hand, higher weights attached to some of the leading blue chips in Sensex compared to Nifty have aided the former.
While market participants have noted the difference in returns between the two benchmark indices, they do not intend changing their trading or portfolio strategies. Most trading continues to take place in Nifty and call options. There is no change in our trading strategy. The disparity is mainly due to the weightage and difference in index constituents, thats all, said Gaurav Bhandari, senior VP, institutional equities, Centrum Capital.
In dollar terms, too, the Sensex (-20.1% YTD returns) has pipped Nifty (-22.37% YTD returns) by a margin of 2.27%, data showed. The sharp difference between the rupee and dollar returns of the indices is due to the 17.5% depreciation in the Indian currency this year.