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The Nifty closed higher for the fifth straight month in September. Among the sectors, media, real estate, oil & gas, telecom, and utilities were the top performers during the month whereas metals was the only laggard. Individual stocks like Coal India, NTPC, ONGC, Tata Motors were the top supporters. On the other hand, Tata Steel, BPCL, Tata Consumer, UltraTech led the laggards.

Additionally, midcaps and smallcaps outperformed largecaps as in the last 12 months, midcaps have risen 79% as compared to 57% rise for the Nifty. 

Recommending as its top stock ideas, Motilal Oswal's picks in the midcaps include Max Financials, Steel Authority of India (SAIL), Deepak Nitrite, L&T Technology, APL Apollo Tubes, Chola Finance, JK Cements, Indian Hotels, Orient Electric, Aditya Birla Fashion and Retail (ABFRL).

“The markets have been rallying and how! A segment of the market has taken off and is now discounting earnings well into the future. Liquidity, benign sentiment, declining COVID-19 cases, upbeat corporate commentaries, and low cost of capital have lifted the valuation multiples to stratospheric levels for many desired high-quality names across sectors," the brokerage said in a note. 

Rising energy and commodity prices, disruptions in global supply chains and speculation around the US Fed Taper and the eventual normalization of the interest rate environment sometime in CY22 could keep the markets volatile, in Motilal Oswal's view.

In September, key global markets such as Japan (+5%), India (+3%), Indonesia (+2%), Russia (+1%), and China (+1%) closed higher in local currency terms. However, Brazil (-7%), the US (-5%), MSCI EM (-4%), Korea, Taiwan, and the UK ended lower.

In the last 12 months, MSCI India (+53%) has outperformed MSCI EM (+16%). In the last 10 years as well, MSCI India has outperformed MSCI EM by 175%.

Under largecaps, the brokerage firm's top ideas include ICICI Bank, SBI, Infosys, HCL Technologies, UltraTech, HUVR, Titan, Divi's Labs, Hindalco, and SBI Life.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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