Year in Review: Broader markets continue to lag as FPIs stick to large-caps

Polarisation in the markets continued in 2019, with institutional flows sticking to safety of large-caps. As a result, the broader markets continued to lag. The Nifty Midcap closed 5 per cent lower, while the Nifty Smallcap fell about 11 per cent. Domestic institutional investors (DIIs) also shied away from committing large funds, as fund managers avoided mid- and small-cap stocks with no major signs of an earnings recovery. In 2019, DIIs bought Rs 41,443 crore of equities, which was not even half of the Rs 1 trillion put in by foreign portfolio investors (FPIs). Even though the Nifty touched its