Trichur, Sept. 23 -- Small-cap stocks are trading at nearly twice the valuation of the Nifty 50, highlighting a sharp gap across market segments, while a sustained return of foreign institutional investors (FIIs) could be important for narrowing the valuation difference, VK Vijayakumar, Chief Investment Strategist of Geojit Investments, said in an interview with ANI.

Vijayakumar said the Indian market is currently seeing an unusual difference in valuations between large-cap, mid-cap and small-cap stocks.

According to him, the Nifty 50 is trading at a trailing price-to-earnings (PE) multiple of 19.7, compared with 29.9 for the Nifty Midcap 100 and around 34.4 for the Nifty 100 Smallcap index.

"This is a very important characteristic of ...