Indian equity investors have favoured large cap companies in the first six months of the year—which saw high market volatility amid multiple geopolitical tensions, erratic energy prices, and imposition and later pause of reciprocal tariffs by the US.

The mid- and small-cap benchmark indices, which gained 4% and 0.3% in the first six months, respectively, have largely underperformed the Nifty and Sensex in the January to June period this year compared with double-digit returns in the same period last year.

On the sectoral front, the Nifty Defence index made a comeback amid rising IndoPak tensions, after taking a beating in the first two months of the year. It was the top performer in the first half, followed by capital markets and financial indices.

Nifty IT index was the top loser during this period. Defence company Garden Reach Shipbuilders almost doubled in the sixmonth period and emerged as the top gainer of the Nifty 500 index.

After facing intense competition and falling volumes, Ola Electric shares declined the most at 50%. The IPO rally of 2024 also cooled down in the first six months of 2025, with 23 companies raising Rs 31,470 crore from the primary market so far, down from 60 companies which raised Rs 1.3 lakh crore in July-December, 2024.