The domestic stock markets made hefty gains in July, with the Sensex and Nifty gaining over 6% each to scale fresh record highs. Although the rally was narrow and mostly driven by select large-cap stocks, there has been a recent recovery in the mid-cap and small-cap stocks. With a comeback of mid and small-caps, the market breadth is expected to widen in the next quarter, believes S Krishnakumar, CIO of Sundaram Mutual Fund. He suggests investors to balance their investments into mid-and small caps. "The results that have been coming through in the last 30 days, we have seen a fairly healthy improvement all-round. It's not just only large caps, but even small and mid caps doing well. There is a wholesome recovery in earnings that we are seeing across the board," Krishnakumar told CNBC-TV18 in an interview. "To the extent that our belief was that there will be a catch up in the mid and small cap and the broad market width would expand as people would start looking outside the top 10-15 stocks which are holding up the Nifty. We continue to believe that the market breadth will widen in the next quarter." S Krishnakumar said that with a lighter event calendar for the next couple of months, no significant negative news flow is expected for the stock markets that could derail investors sentiments. "We believe that investors should balance their investments into mid-and small caps too," he said. Krishnakumar expects the Nifty to remain broadly rangebound in the next six months and says that there would be far more sector rotation that would happen in stocks that have been languishing compared to the movers of the index. "We do see that money will rotate into banks and other sectors which probably do offer good value. That is the way we would look at it and that is why we believe that the market breadth would also widen at this point in time."