Lopsided stocks market rally has investors weighing other options

The S&P BSE Sensex has risen about 12% from a low in September, with three members - Reliance Industries, ICICI Bank and HDFC Bank - accounting for 61% of all the gains

Investors are starting to weigh the merits of rotating into small- and mid-sized Indian stocks after a few large companies drove a record-breaking rally in the main equity index.

“Leadership in India’s rally has been very narrow,” Tim Moe, chief Asia Pacific equity strategist for Goldman Sachs, said here last week. “Valuations are at the high end of the range, both in historical terms and relative valuation compared with the region as a whole.”

The S&P BSE Sensex has risen about 12 per cent from a low in September, with three members — Reliance Industries, ICICI Bank and HDFC Bank — accounting