Huge outperformance of mid & small-cap indices unlikely to continue, say analysts

The huge outperformance of the mid and small-cap indices in Samvat 2079 is unlikely to continue in 2080, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Large-caps are fairly valued and, more important, safe now. Leading financials have the potential to outperform. Automobiles, construction- related segments, digital platform companies, select pharma, capital goods and telecom companies are on strong wicket, he said.

The good beginning for Samvat 2080 with a 100 point rally in Nifty is indicative of the bullish sentiment in the market. The market is climbing walls of worries posed by two wars and a slowing global economy. This happens in a bull market. Investment strategy should be based on this basic understanding of the market behaviour, he said.

An important feature of the market is that it is up trending despite sustained FPI selling. This means that even if FPIs continue to sell, the market will remain resilient if the selling is in small quantities. Of course, big selling by FPIs will negatively impact markets, he added.

BSE Sensex is down 397 points at 64,861 points on Monday. Bajaj Finance, ICICI Bank, Asian Paints are down more than 1 per cent.