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The Advance Decline Ratio (ADR) is a market-breadth measure. It compares the number of advancing stocks with the number of declining stocks during a specified period.
Last updated on: Sep 23, 2026
Market indices show the performance of their constituents according to the methodology used to calculate the index. The Advance Decline Ratio (ADR) provides additional information by comparing the number of advancing and declining stocks.
The Advance Decline Ratio (ADR) measures the relationship between advancing and declining stocks over a defined period. Understanding the advance decline ratio meaning starts with recognising that it counts how many stocks closed higher against how many closed lower, rather than measuring the size of an index-level price change. Unlike index values alone, ADR reflects internal market composition that is not directly shown in headline benchmarks such as the Nifty or Sensex.
The Advance Decline Ratio (ADR) is calculated using the following formula. The Advance/Decline Ratio (ADR) is calculated by comparing the number of stocks that close higher with those that close lower during a specific market session.
ADR = Number of Advancing Stocks ÷ Number of Declining Stocks
Advancing stocks: Stocks that close above their previous session's closing price.
Declining stocks: Stocks that close below their previous session's closing price.
An ADR above 1 indicates that advancing stocks outnumber declining stocks, while a value below 1 reflects a higher number of declining stocks than advancing stocks.
Example
Assume that on a particular market day:
900 stocks close higher
600 stocks close lower
ADR = 900 ÷ 600 = 1.5
An ADR of 1.5 means that the number of advancing stocks was 1.5 times the number of declining stocks.
The Advance Decline Ratio reflects how broadly market movements are distributed across listed stocks, offering context beyond headline index performance. This can refer to exchange-wide readings as well as readings calculated for a specific index or group of securities.
The ratio counts how many listed stocks closed higher versus how many closed lower within a session, which is a distinct measure from the size of an index's overall percentage move.
ADR is derived by dividing the number of advancing stocks by the number of declining stocks over a defined period. See the ‘Formula to Calculate Advance/Decline Ratio' section above for the full method and a worked example. A market-wide ADR reading and an index-level move do not always change by the same degree, since ADR reflects the count of individual stocks rather than the size of the index-level price change.
Values above 1 indicate more advancing stocks, while values below 1 reflect a higher number of declining stocks.
ADR can be calculated for different periods. Readings for individual sessions may differ from readings calculated over multiple sessions because the number of advancing and declining stocks can vary from one session to another.
ADR and index movements measure different aspects of market activity: ADR reflects the number of advancing and declining stocks, while an index reflects the price movements of its constituents according to its methodology.
The Advance/Decline Ratio (ADR) can be presented in different forms depending on the market coverage, reporting period, or source of the data. Common forms include:
Exchange-wide ADR: Represents the ratio of advancing stocks to declining stocks across the securities covered by an exchange or its specified market-data universe.
Index-level ADR: Represents the ratio of advancing stocks to declining stocks among the constituents of a specific stock market index.
Sector-level ADR: Represents the ratio of advancing stocks to declining stocks within a particular sector or industry group.
Period-specific ADR: Represents the ratio of advancing stocks to declining stocks for a specified market session or reporting period.
The calculation remains the same across these forms: the number of advancing stocks is divided by the number of declining stocks. The stocks included in the calculation may differ depending on the market, index, sector, or reporting period being considered.
The Advance Decline Ratio is commonly referenced as a supporting market-breadth measure due to the following characteristics:
Relatively straightforward to calculate using daily advancing and declining stock data.
Provides visibility into how widely market movements are distributed across listed stocks.
Less influenced by large-cap stocks compared with purely cap-weighted indices, offering a broader view of participation.
Helps highlight shifts in market breadth that may not be immediately visible in headline index levels.
May reflect changes in underlying participation patterns when observed across multiple sessions.
While the Advance Decline Ratio offers insight into market breadth, it also comes with structural constraints that can affect how readings are interpreted across different market conditions.
ADR counts each qualifying advancing or declining stock once, regardless of its market capitalisation or trading volume. As a result, movements in small or thinly transacted stocks can influence the ratio as much as large-cap stocks, which may not accurately reflect overall market direction.
ADR readings can change when the number of advancing and declining stocks changes significantly between sessions.
If advances or declines are concentrated in particular sectors, the overall ADR may differ from the performance of other parts of the market.
ADR measures only the count of advancing and declining stocks, without considering volume. ADR does not incorporate trading volume. Therefore, it does not indicate how much trading activity accompanied the price movement of individual stocks.
ADR reflects the number of advancing and declining stocks but does not incorporate factors such as company financials, valuation measures, economic conditions, or trading volume.
Read More: What is Nifty 200 Index
The Advance Decline Ratio counts the number of stocks that closed higher against the number that closed lower within a defined period, typically a single market session. It is computed by dividing the count of advancing stocks by the count of declining stocks, with values above 1 meaning more stocks advanced than declined, and values below 1 meaning the opposite.
Reviewer
The Advance Decline Ratio (ADR) compares the number of advancing stocks with the number of declining stocks over a defined period. It provides information about the relative number of stocks recording gains and declines.
It is calculated by dividing the number of stocks that closed higher than the previous session by the number of stocks that closed lower during the same period.
A declining ADR means that the number of advancing stocks has decreased relative to the number of declining stocks. The exact interpretation depends on the underlying advance and decline counts for the period.
NSE publishes advance-decline data through its market-data pages. Its Capital Market Snapshot includes advances, declines, unchanged securities and the AD Ratio.
A 10-day ADR is a multi-session ADR measure based on data from ten market sessions. The calculation methodology may vary depending on the source providing the data.
An Advance Decline Ratio chart displays ADR readings across multiple market sessions. It can show how the ratio between advancing and declining stocks changes over time.
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