SBI Funds: Large-Caps Best Bet for 2026 Amid Expensive Mid & Small-Caps

• SBI Funds Management's Market Outlook 2026 favors large-cap stocks for investment due to attractive valuations and clear earnings prospects.
• Mid-cap and small-cap segments are considered expensive, with a caution against excessive investment despite potential pockets of value.
• In 2025, large-cap indices outperformed (Nifty 12%, Sensex 10.5%), while Nifty Midcap 150 returned 6.2% and Nifty Smallcap 250 declined 5.3%.
• The market received significant support in 2025 from government tax relief, GST reduction, labor reforms, and RBI's 1.25% repo rate cut.
• For 2026, focus is on corporate earnings growth, government capital expenditure, and fiscal deficit reduction to strengthen market sentiment.

Why It Matters: SBI Funds recommends large-cap stocks for 2026 due to better valuations and earnings clarity.