Large caps companies to outperform as mid and small caps struggle: SBI

The gap between the performance of large-cap companies and the rest of the companies in the domestic stock market is expected to continue amid weak earnings, highlighted a report by SBI Mutual Fund.

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The report stated, “Given that large caps stay cheaper than broader markets on relative valuations, we believe polarization in equity markets may continue to increase”.

Polarisation in the equity markets means that gains are being driven mostly by a few large companies, while the broader market, which includes mid-cap and small-cap stocks, is not performing as strongly.