2018 outlook: Small, mid-caps to surprise, FIIs to remain bullish on India

Retail investors would do well to stick to their asset allocation plans, review their small and mid-cap holdings closely and bring down their return expectations for the next few quarters.

With government policies set to tilt more towards the "stress-ridden rural landscape" next year in the run-up to the 2019 Lok Sabha elections, the Indian economy may reach a 7 per cent growth in 2018 while recovering from the lingering effects of demonetisation and GST, industry chamber Assocham has said. India is the third-most preferred equity market among EMs after Brazil and Mexico for 2018, according to a Bloomberg survey of traders, strategists and investors.  This author discusses the stock market outlook for next year. 

Indian retail investors have taken to equity markets (directly as well as through the mutual