Indian equities rallied on October 6, with gains across the board.

The Nifty 50 rose 0.98% to 22,776.10 and the Sensex added 0.95% to close at 73,067.81. The Nifty 500 climbed 1.05% to 22,202.85 and the BSE 500 gained 0.98% to 34,726.57. Buying was broad across market-cap segments, giving some relief after recent selling.

Large caps still carry heavy losses for the year. The Sensex is down 14.26% year to date and the Nifty 50 is down 12.83%. October has been slightly better so far, with the Nifty 50 up 0.69% and the Sensex up 0.81%. Over the past month, major indices are still down between 4.03% and 4.22%, a reminder of how much damage September did. Over six months, the BSE LargeCap index is down 4.37%, and it is down 11.39% for the year.

Smaller companies continue to do better. The Nifty Smallcap 100 was the top performer on the day, up 1.56%, and it has gained 9.79% this year and 16.03% over six months. The Nifty Midcap 100 is down only 1.20% year to date and up 3.91% over six months. The Nifty Next 50 has bucked the large-cap trend, rising 0.88% for the year, which suggests there are pockets of opportunity outside the front-line indices.

Over one year, the Nifty Smallcap 100 is up 8.48% while the Nifty 50 is down 9.18%, so money still appears to be rotating away from large caps. At the same time, one-month and three-month returns show weakness in every segment, which points to broader consolidation. It is unclear whether today's rally will last or large-cap pressure will return. The valuation gap between large and small caps calls for caution, since a reversion could favour either side depending on macro conditions and earnings in the coming quarters.