Riding on retail sentiment

If that were to go down, mid- and small-caps may take a bigger hit

Retail sentiment, which has driven the market for the last two years, has started looking weaker. The first signs were the narrowing of the market. Breadth declined, as the ratio of advancing shares to declining shares went down. 

A second related signal was the underperformance of small-cap and mid-cap indices compared to large-cap indices.  While large-caps have been net gainers with the Nifty up 9.5 per cent and the NSE 500 (which includes the top 500 stocks in the market) up 3.5 per cent since January, the Nifty small-caps 250 is down 17 per cent and the mid-caps 250 is