HDFC Securities Ltd said on Thursday that mid-cap and small-cap indices are most likely to outperform the benchmarks in 2020 after two consecutive years of under-performance.
"The markets are getting polarised day-by-day in terms of volumes and market capitalisation. This means that a vast portion of portfolio of retail and high net-worth individual (HNI) investors do not reflect the bullishness displayed by Nifty," said the leading stock broking company. Investors are now selling stocks and mutual funds at a faster pace than earlier in the present age of disruption. One of the reasons for this is also the low difference in tax rates between short-term and long-term capital gains, said HDFC Securities adding that investors are also shaken by frequent changes in the composition of Nifty and Nifty mid-cap indices. "The composition of the trading pattern at the exchanges is slowly changing with institutions doing the investment part, proprietors providing the liquidity and retail and HNIs playing the intra-day or extreme short-term game."
