Select large caps likely to give good returns in 2021, say analysts

With valuations at a premium, brokerages highlight the need for caution

A sharp recovery, after the fall in March, helped benchmark indices post their second consecutive double-digit growth of 15 per cent in 2020. While defensives such as health care and information technology sectors dominated the returns charts, growth became more broad-based towards the second half with cyclicals, too, catching investor attention. It was not just growth across sectors but down the market capitalisation ladder as well.

After their underperformance over the past couple of years, small and mid cap indices did better than the benchmarks with returns over 20 per cent for the year. Going ahead, the Street expects strong economic