Return of the big boys: Why large-cap stocks might be the best bet for 2018

The Sensex has rallied a little more than three per cent; the BSE mid-and small-cap indices have gone up only 0.6 per cent and 2.1 per cent, respectively

Investors aligning their investments to indices would be better placed betting on large-caps in 2018, it would seem.

After four years of underperformance, the blue chip-focused Sensex and Nifty are expected to fare better than the small-cap and mid-cap indices, going by forecasts of brokerages. According to Bloomberg consensus data, analysts are predicting an average eight per cent upside to Sensex companies, compared to three to four per cent expected on the BSE mid-cap and small-cap indices.

Analysts say the valuations of broader markets look stretched and revival in the earnings of smaller companies might lag larger peers. Experts say earnings visibility