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Suspense crime, Digital Desk : On the surface, the Indian stock market presents a confusing picture. Major indices like the Nifty and Sensex are scaling record highs, yet whispers of caution are everywhere. Foreign Institutional Investors (FIIs) have been selling off their holdings, global economic uncertainties linger, and many worry that stock valuations have become too expensive.

However, if you look “under the hood” of the market, a much more optimistic story emerges—one that points to a surprisingly strong and healthy foundation for this bull run. The secret lies in a concept called market breadth.

Think of it this way: a market rally can be powered by just a handful of superstar, big-name companies, which can artificially pull the entire index up while most other stocks lag behind. This is a narrow, fragile rally. A truly strong market, however, is one where a vast majority of companies—big, medium, and small—are all moving upward together. This is called a “broad-based” rally, and it’s exactly what’s happening in India right now.

The key indicator revealing this strength is the number of stocks trading above their 200-day moving average (200-DMA). The 200-DMA is essentially a long-term health check for a stock, showing its underlying trend over nearly a year. When a stock is above this line, it’s generally considered to be in a healthy, long-term uptrend.

Recent analysis of the Nifty 500—a much broader index than the Nifty 50—shows something remarkable. A whopping 80% of the 500 companies in this index are currently trading above their 200-DMA. This isn’t just a rally; it’s a powerful, widespread wave of investor confidence that includes a huge number of mid-cap and small-cap stocks.

So, what does this mean for the average investor?

It signals that the market’s current strength is not a fluke or a bubble inflated by a few giants. Instead, it reflects genuine, deep-rooted optimism across the economy. While foreign investors have been hesitant, powerful domestic institutional investors (DIIs) and retail investors have stepped in with force, showcasing their confidence in the Indian growth story.

This broad participation acts as a crucial safety cushion. Even if a few large-cap stocks correct, the widespread strength in the rest of the market can help absorb the shock, making the entire structure more resilient.

While short-term volatility, especially around events like elections, is always possible, this strong market breadth suggests the Indian bull market is standing on solid ground with a powerful, bullish undercurrent driving it forward.

Read More: Beyond the Big Names: Unpacking the Hidden Strength of India’s Stock Market