The Sensex may have hit a new high at 36,548.41 points on Thursday but more than 75% of stocks in the broader market are down between January and now. That’s because only a handful of stocks are driving up the indices; the rest are underperformers. An FE study showed more than 75% of all stocks with a market capitalisation of Rs 1,000 crore and above are in the red so this year. As Bank of America Merrill Lynch put it, India’s version of a “Fin-Tech” re-rating is supporting the index amid a correction. The stocks that have done spectacularly are Tata Consultancy Services (TCS), Kotak Mahindra Bank, HDFC, HDFC Bank, Infosys and Reliance Industries (RIL).

Of the Nifty 50 companies, 31 are trading in the red with just 10 companies driving up the benchmark. At 11,023.20 points, the Nifty is now is just around 100 points away from its all-time high closing level of 11,130.40. But the Nifty mid-cap index, at 18473.9, is down 12% since January.

At Thursday’s new high, the Sensex in 2018 so far has been flat in dollar terms while the Dow is up marginally by 0.7%. India is a very expensive market. At 36,548.41, the benchmark Sensex trades at a price-earnings(PE) multiple of 18.01 times to the estimated one-year forward earnings, a premium of 12.4% to the long-term average PE of 16.03 times. This compares with 8.6 times for South Korea’s Kospi and 14.2 for the Jakarta Composite. Brazil’s Bovespa and the Shanghai Composite are trading at a price-earnings multiple of 10.4 and 10.6, respectively, data from Bloomberg show.

Thursday also saw RIL — the most valued company after TCS — re-entering the $100-billion club after more than a decade. The two together boast over 22% of the combined market capitalisation of Sensex.  The poor breadth of the market has probably kept foreign portfolio investors (FPIs) away; since April, FPIs have sold stocks worth $2.9 billion, the bulk of it in May. However, domestic institutions have been buyers to the tune of $6.1 billion. Local buying since January has hit nearly $10 billion whereas foreign funds have sold shares worth $790 million.