Is the tide about to turn for large caps?

The Indian market has been flat at the index level since 2024, with the Nifty 50 largely sideways while the BSE Midcap 150 hit a new 52-week high and the BSE Smallcap 250 trades near its 52-week high. Strong retail and mutual fund flows have offset persistent FII selling, particularly benefiting mid and small caps. Large cap fundamentals remain solid with the Nifty PE around 21 and no major debt concerns, suggesting a potential resurgence once Middle East tensions ease and a US trade deal is finalised.