The Nifty Microcap 250 index posted a strong performance in the month of May, rising 12.10 per cent, while the Nifty Smallcap 250 also recorded an impressive 9.59 per cent gain, according to a report released on Saturday.
The broader market remained positive throughout the month, with smaller companies leading the rally, said the latest 'Global Market Snapshot' report by Motilal Oswal Asset Management Company.
Over the past year, the Nifty Microcap 250 grew by 13.74 per cent, and the Nifty Smallcap 250 gained 7.72 per cent, showing continued investor interest in micro and small-cap stocks. Other major indices also posted gains in May.
The benchmark Nifty 50 rose 1.71 per cent, while the Nifty Next 50 and Nifty Midcap 150 advanced by 3.49 per cent and 6.30 per cent, respectively. The Nifty 500 index climbed 3.50 per cent, supported by strong performances in sectors such as industrials, consumer discretionary and financial services.
The Defence sector emerged as the best performer, registering a sharp 21.84 per cent rise in May alone, and 30.78 per cent growth over the past year. According to the report, all major sectors showed a positive trend except FMCG and Utilities, which saw slight declines of 0.09 per cent and 0.04 per cent, respectively.
Factor-based investment strategies also delivered steady returns. The momentum and quality indices rose by 5.40 per cent and 4.82 per cent, while enhanced value and low volatility gained 4.20 per cent and 1.39 per cent, respectively.
On the commodities side, gold saw a decline of 0.74 per cent during May, as geopolitical tensions -- especially between the US and China eased, reducing the demand for gold as a safe-haven asset.
The report suggests that investor confidence remained high across broader markets in May, with strong participation in mid, small, and micro-cap segments. Analysts believe this trend reflects optimism around domestic economic growth, sector-specific strength, and favourable global cues.