The Nifty 50 was the informal name for a group of stocks in the 1960s and 1970s considered to be blue chip, buy-and-hold growth stocks. The group no longer exists, along with some of the original constituents. When it did, the Nifty 50 was viewed much like we consider some mega-cap tech stocks today: As they go, so goes the market. A persistent worry during this current bull market has been a handful of stocks accounting for much of the S&P 500’s gains. The thinking here is that without stronger breadth across stocks, the broad market may be vulnerable to some mega caps driving market direction—regardless of the underlying fundamentals of the rest of the market. It’s worth noting that market share for the Nifty 50 leveled off in the 1970s. That historical trend, plus valuations for both the 50 largest S&P 500 companies (which are sometimes used as a proxy for what the Nifty 50 represented) relative to the other 450 constituents, may suggest the lack of market breadth may not be as worrisome as some think.
